State Senator Cam Ward reported to me that the surplus funds amendment was approved on the last day of the legislature. The original version, requested by the Alabama bankers, would change current law so that surplus funds are payable only the party who redeems after a tax sale. Their goal was to correct the problem when a defaulting borrower also fails to pay his property taxes. After a tax auction, the borrower/owner could claim the surplus funds, while the foreclosing bank would have to PAY those funds in order to redeem and then afterwards foreclose.
I agree, that was an unfair situation. BUT, the amendment urged by the bankers failed to take into consideration the situation in which a property owner has no mortgages or other liens, and fails to pay his property taxes. What happens to the surplus funds after that is really NONE OF THE BANKERS’ BUSINESS!!! Yet, their proposed amendment means that in such a situation, if the owner never redeems, then he can also never claim the surplus funds. The County eventually gets the money, in a completely unfair windfall.
I’m not sure what version was passed. Hopefully it was the one I suggested, that limited the bankers’ solution to only those situations where there is a lien.
As soon as I can find the final, approved, version, I’ll report to you again.