Massachusetts Surplus Funds: A Recovery Agent's Guide

Checked against the official state code and government office pages in November 2026.

Who gets the money left over? It depends on the type of foreclosure.

Massachusetts allows both judicial and nonjudicial foreclosure. A power-of-sale foreclosure can be held by the mortgagee or someone authorized by the power of sale. The sale takes place through a public auction. Massachusetts laws describe both methods.

For a sale of property covered by a Chapter 254 lien, priority mortgagees are paid before creditors with liens under that chapter. Any surplus after the listed payments goes to the property owner. Before it is paid, the surplus may be attached or taken to pay a judgment. (Section 21)

For a mortgage sale, Section 27 names the mortgagor as a person entitled to any surplus. Under Section 27, the mortgage holder retains amounts secured by the mortgage and pays any surplus to the mortgagor, unless the mortgage says otherwise.

For a tax foreclosure, former owners may seek excess equity. The law also names others entitled to redeem. Under Section 1, if the property is sold, excess equity is the sale price minus the tax title balance, unpaid property taxes and listed charges that accrue after foreclosure, and documented costs after judgment related to the sale. If the judgment holder keeps the property, excess equity is the property's appraised highest and best use value on the judgment date minus the tax title balance and documented appraisal costs after judgment. A judgment holder keeps this excess equity in a segregated, interest-bearing account under § 64A(e).

For a sale on distress or seizure, the collector must, on demand, give the owner a written account of the sale and charges and pay any surplus left after taxes, interest, and the costs of keeping and selling the property. (Section 28)

Mortgage surplus may go to the former owner's heirs or successors. Section 27 also names assigns. Check the mortgage terms, since the mortgage may state otherwise.

Section 27 names an assign as someone who may receive mortgage surplus. That gives assignees a clear path for mortgage-sale surplus. Tax-sale excess equity follows different rules. The statute names former owners and others entitled to redeem.

The mortgage statute names mortgagors, heirs, successors, and assigns. It doesn't list power of attorney holders or attorneys as separate people entitled to the money. The tax-sale rule identifies former owners and others entitled to redeem.

Under Mass. Gen. Laws c. 200A, § 13, agreements to pay compensation to recover or assist in recovering property reported under section 7 are unenforceable if made within 24 months after payment or delivery under section 8A. After that period, an agreement is valid only if it is in writing, signed by the owner, discloses the nature and value of the property and who holds it, and the fee does not exceed 10 percent. We didn't find a clear official answer on whether this rule applies to foreclosure surplus.

For mortgage surplus, Section 27 says the mortgage holder pays the surplus to the mortgagor or their heirs, successors, or assigns. The holder must provide a written itemized accounting within 60 days after receiving the sale funds. The accounting must list the sale price, legal fees, auctioneer fees, publication costs, other fees, and any surplus due to the mortgagor. If further legal proceedings are pending, the accounting is stayed until they end. The 60 days is an accounting deadline, not a stated deadline to claim surplus. (Section 27)

For tax-sale excess equity, the judgment holder keeps the money in a segregated, interest-bearing account. Excess equity still unclaimed within 19 months of a sale or appraisal is disposed of under chapter 200A. The Massachusetts tax-sale statute doesn't identify who ultimately receives the money after that transfer.

• The mortgage statute gives no deadline for claiming surplus. Ask the mortgage holder about its process.
• The law doesn't spell out who can claim tax excess equity for another person. Ask the office holding the money what it requires.
• Chapter 200A, § 13 sets a 10 percent fee limit for certain agreements, but we didn't find whether that rule applies to foreclosure surplus. Ask a licensed attorney about an agreement before using it.
• The law doesn't identify who ultimately receives unclaimed tax-sale equity under chapter 200A. Check with the office handling the unclaimed property.

I've been recovering surplus funds since 2013. That's over 2,000 cases and more than $100 million recovered for foreclosure victims across the country. A foreclosure can be painful for a family. Clear information can help them take the next step. Start by finding out whether the funds came from a mortgage sale or a tax foreclosure. Then confirm who holds them.

If you want to learn how this business actually works, join the free Surplus Funds Masterclass at surplusfunds.ai, or join the free Surplus Funds Collective community on Skool at skool.com/surplusfunds.

This guide is education, not legal advice. Laws change, so check the official statute and talk to a licensed attorney in your state before you act.