“Hooked on Overages” Mini-Course #4:

More on County Unclaimed Funds

We’ve now learned that that pursuing unclaimed funds from the state will be unprofitable – and that county-held funds are our “bread and butter”.

How do counties come into possession of unclaimed funds?

Many ways. But let’s focus on the biggie – foreclosures.

How the heck could a foreclosure generate funds that sit unclaimed at the county?

Simple. A property was offered at a tax sale or mortgage foreclosure auction – and the property wound up selling at the auction for more than what was owed.

Here are a couple examples:

A property has a $50,000 mortgage, and the owner stops making payments. The bank forecloses on the property and it’s offered at a public foreclosure sale.

The property is worth $100,000 and a bidder offers $70,000 for it. SOLD!

The county collects the $70,000 and pays off the bank for the $50,000 that’s owed.

What about the extra $20,000? It sits there waiting for the owner to collect.

How about a tax sale?

If a property owner doesn’t pay their property taxes for a number of years, the county gets serious about collection. In many cases the county auctions off the property so the tax money can be recovered.

The county may offer the property at public auction for just the taxes owed. What happens when a county offers a property worth $50,000 at a public sale for a few thousand bucks?

Someone often comes along and bids a whole lot more. Yes, even in today’s market.

Once again, the county is satisfied for the taxes owed and is holding lot of excess funds. These are due the former owner of the property in many cases.

We’ll get lists of those funds and find the owners…then share in the proceeds.

Today’s Featured Video:

“How Counties Get Unclaimed Funds”