Who is Entitle to the Surplus From Mortgage Foreclosure Sales in Florida?

In Florida, second mortgage lenders gained certificate of title to subject property by foreclosing on second mortgage prior to the foreclosure by the first mortgage lender. The second mortgage holder then successfully bid on the subject property at the first mortgage lender’s foreclosure sale. The sale of the property generated a surplus to which both the owner and the second mortgage lender claimed entitlement. The court held that obtaining a certificate of title in Florida is not sufficient to amount to “an involuntary transfer or assignment of the right to collect the surplus.” Thus, the owner was granted the surplus from the proceeds of the sale.

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