When a property is sold through judicial mortgage foreclosure, the sale proceeds are first applied to satisfy the mortgage debt, court costs, attorney fees, and any subordinate liens. If the winning bid exceeds those obligations, the remaining balance becomes surplus funds.

These funds are typically held by the court or sheriff’s office until properly claimed. In many jurisdictions, time limits apply, and failure to file within the allowed period may result in forfeiture.

Understanding how these funds are calculated and where they are held is critical to ensuring recovery.