They treat surplus funds from mortgage Foreclosures and tax sales differently.

Surplus eventually causes prices to start falling.

The county will keep the surplus funds.  

On the one hand we have buyers of new (or replacement) houses who must have loans in order to buy the home they want.In qualifying for the new homes, they must somehow dispose of their old houses.When money is "tight", the sale market slows down, placing both the builders (and their lenders) and the buyers (who must first sell their existing residences in order to qualify for a loan) into a quandary.At the same time, a portion of the market (investor/speculators) willing to absorb the surplus houses is prevented from doing so because of the same shortage of mortgage funding.The solution lies in creative financing techniques.Read on.The following pages address themselves to this parallel dilemma of the market, the builders, the lenders, the buyers, the sellers, investors and speculators.For the agile investor, CommonWealth Letters have a slogan: "THE GOOD NEWS IS THAT THERE IS BAD NEWS".In so many words, what that means is that in tough times, when credit has dried up the markets, only those who have cultivated buying, selling, fixing, management, negotiating, and financing skills survive and prosper, but, when we have prosperity in the United States, it is possible for ANYONE to succeed.Our markets are so vast, our citizens so affluent, our institutions so liberal, that practically every form of commercial activity has a theoretical and statistical chance to succeed.The problem with that scenario is that good times cause millions of would-be entrepreneurs to enter the market place.Success becomes a very competitive venture in which those with true ability are virtually in-distinguishable from those without the skills and knowledge normally required as a prerequisite to prosperity.Thus, our endeavors receive only average returns even though we might be able to contribute above average talent, energy, drive, capital, and imagination.One of the principal reasons for this is that venture capital abounds in good times.Lenders woo the untried, unskilled, untalented in an effort to place the ever increasing funds deposited within their coffers.Interest rates fall as money chases borrowers.The costs of doing business are reduced correspondingly as the cost of money falls, (then they are raised again as the costs of labor and materials escalate to meet increased demand).The ebb and flow of money and production instills a cyclical rhythm into the economy; and just as Winter follows Summer, so must hard times follow the good.In hard times, the reverse of the above holds true.Slowing economic activity causes businesses to retrench.The faint of heart drop out, others cut back on costs, materials, and labor.They slow down their payments to the banks.They with-draw surplus funds to meet current expenses.Bankers, seeing their reserves beginning to diminish, are faced with increasing loan demand from borrowers who foresee less and less certain profits with which to repay them.Interest rates are increased to meet market demand for money.Loan terms are stiffened to discount increasing risks.Money becomes tighter and tighter.Now many of us who have been waiting on the sidelines begin to see opportunities.Those builders who need buyers, those buyers who need new homes, those speculators who are stretched thin with negative cash flows; throngs of those who knew how to prosper during times of business expansion become listless and drift during periods of contraction.Our opportunity derives its strength and vitality from our being able to function in the market place without reliance on any financial institutions.Our competitors, who in prosperity were able to divert many opportunities to themselves, swiftly find themselves "on the ropes" when their lines of credit are withdrawn, because the key to their vigor was easy credit.Without readily available financing, they become ineffective.Phrased another way, those who choose to depend solely upon institutional financing will always find themselves trying to make a profit in a competitive market situation.They will be "in-phase" with millions of others, condemned to mediocre success, dependent upon good times to afford them enough of a living to be able to weather the slow periods.On the other hand, THOSE OF US WHO LEARN HOW TO PROSPER DURING HARD TIMES, WITHOUT THE HELP OF THE BANKERS, WILL BE ABLE TO OPERATE IN A NON-COMPETITIVE, PROFITABLE ENVIRONMENT.

I may have to sue however the big joke us on me because Medi-Cal has put in claims exceeding my $170,000+ Surplus claim. 

We look at "mortgageability" at loan maturity to determine the possibility surplus/deficit they would have by refinancing in the longer term/permanent debt markets. 

It boils down to maximising returns or minimising risk (in theory).Make your cash earn it's keep or take surplus cash and hoard it for someday maybe.Odd thing about cash hoarders is that although they think they are being ultra conservative dead equity actually places your money at a higher risk.

I would think that equity would put Buyer's Contract first in line and as such, Buyer has a superior interest of total possession of the home and no surplus for Lender to claim.Your thoughts?

We use commercial grade typically used for a gymnasium floor ... in fact we managed to "acquire" a few 5gal pails at an alarmingly good price from the surplus when one of the universities installed a new gymnasium a few months ago.

I have also found cabinets cheaper and real wood at Surplus Warehouse,  if you have one around you