Who benefits from surplus funds after a foreclosure sale?

The original borrower benefits from surplus funds after a foreclosure sale because these funds represent any excess amount collected from the sale of the foreclosed property, beyond what was necessary to satisfy the outstanding loan balance and associated fees. In a foreclosure, if the property is sold for more than the amount owed on the mortgage, the borrower is entitled to receive this surplus, assuming there are no other liens or claims against the property that would take priority.

This aspect serves to protect the financial interests of the borrower and ensures that they are not left with additional debt if their property sells for a higher price than expected. It encourages a fair process in foreclosure situations, allowing borrowers to regain some financial footing after a distressing event.

In contrast, while the lender is primarily focused on recovering their loan amount, the auctioneer typically receives a fee for conducting the auction, and the new buyer's interest is in acquiring the property at a good price, rather than receiving surplus funds.