![]() 2017), is a partner with Berkman, Henoch, Peterson, Peddy & Fenchel, P.C. Bergman, author of the four-volume treatise, Bergman on New York Mortgage Foreclosures, LexisNexis Matthew Bender (rev. It is what juniors should understand and focus upon. It does confirm, however, that the very helpful accelerated procedure to garner surplus is resilient. Of course this is hardly a suggestion that second lienholders can be cavalier in pursuing surplus. It is not fatal to the claim of the subordinate mortgage holder. The lower court ruled against the junior and said it couldn=t get a penny.) This variety of carelessness is just an irregularity. What happens, though, if the junior forgets to make its claim for surplus at the closing and doesn=t awaken until months after the timeframe for a surplus money proceeding and only when the foreclosed former owner is demanding all the surplus for himself? Not a problem says the new case. Where there is only one junior mortgage, though, an easier, accelerated procedure is available (often called A1351 stated, the junior mortgage holder makes a motion in the action so that the foreclosure judgment directs the referee to pay the junior mortgage directly and immediately from the sale proceeds at the closing rather than jumping through hoops for six months. So how is that done? The usual route is called a surplus money proceeding which consumes about six months after the sale. Presumably, a second mortgage would be first in line to claim that surplus. In turn, all those with subordinate interests cutoff by the foreclosure can make claim for that surplus in order of their respective priorities. So if anyone bids more than what is due, that extra money, that overage, is the surplus. Details about claiming surplus monies when in a second position may seem obscure, but they are truly important – with some of that detail highlighted by a new case Īs servicers recognize, a foreclosing mortgage holder can only receive foreclosure sale proceeds up to the amount due (as set by the judgment). ![]()
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