After a mortgage foreclosure sale, any excess funds go to whom?

After a mortgage foreclosure sale, any excess funds generated beyond the amount necessary to satisfy the mortgage debt and related costs are typically returned to the mortgagor, which is the borrower or homeowner. This is an important aspect of foreclosure laws, as it ensures that if the property sells for more than what is owed, the additional funds are rightfully given back to the owner, rather than being retained by other parties involved in the mortgage transaction.

The rationale behind this is rooted in fairness and the legal rights of the mortgagor. Foreclosures can be a financially distressing experience for homeowners, and allowing them to reclaim any surplus from the sale helps to mitigate some of that financial loss. Consequently, ensuring that the mortgagor receives these excess funds aligns with the principle that they should not suffer further financial detriment after losing their property. This practice supports the idea that former homeowners deserve compensation for any equity they may have had in the property.