Mattie,


According to California Civil Code § 2924 any surplus bid amount that occurs at a Trustee’s Sale goes downward to the next junior lienor in priority. If there still remains a surplus after that junior lienor is paid in full then it continues down in a daisy chain fashion until the overbid is finally exhausted.

In the event that there is an overbid balance, but no junior lienor to pay, then that money will go, in its entirety, to the property owner who was on title at the time of the Trustee’s Sale.

No overbid amount ever goes to liens that are senior in priority to the foreclosing lien. Such proceeds always go to the junior lienors, and possibly even the foreclosed owner, who is the most subordinate junior stakeholders of any real property interest.

Therefore, no overbid would ever go to pay off property taxes since they are the most senior lien.

Whether or not a recorded abstract of judgment would ever share in an overbid distribution depends upon its priority position amongst other lien-holders that are junior to the foreclosing lien. In the unlikely event that an abstract of judgment recorded senior to the foreclosing lien then it would not share in any overbid distribution.

--------------------------Ward

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