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U.S. Code as of:
01/19/04
Section 3712. Disposition of sale proceeds
Money realized from a foreclosure sale shall be made available
for obligation and expenditure -
(1) first to cover the costs of foreclosure provided for in
section 3711 of this title;
(2) then to pay valid tax liens or assessments prior to the
mortgage;
(3) then to pay any liens recorded prior to the recording of
the mortgage which are required to be paid in conformity with the
terms of sale in the notice of default and foreclosure sale;
(4) then to service charges and advancements for taxes,
assessments, and property insurance premiums;
(5) then to the interest;
(6) then to the principal balance secured by the mortgage
(including expenditures for the necessary protection,
preservation, and repair of the security property as authorized
under the mortgage agreement and interest thereon if provided for
in the mortgage agreement); and
(7) then to late charges.
Any surplus after payment of the foregoing shall be paid to holders
of liens recorded after the mortgage and then to the appropriate
mortgagor. If the person to whom such surplus is to be paid cannot
be located, or if the surplus available is insufficient to pay all
claimants and the claimants cannot agree on the allocation of the
surplus, or if any person claiming an interest in the mortgage
proceeds does not agree that some or all of the sale proceeds
should be paid to a claimant as provided in this section, that part
of the sale proceeds in question may be deposited by the
foreclosure commissioner with an appropriate official or court
authorized under law to receive disputed funds in such
circumstances. If such a procedure for the deposit of disputed
funds is not available, and the foreclosure commissioner files a
bill of interpleader or is sued as a stakeholder to determine
entitlement to such funds, the foreclosure commissioner's necessary
costs in taking or defending such action shall be deductible from
the disputed funds.
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