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Council presses corporation counsel over foreclosure surplus funds; courts deemed prior payouts a 'gift of public funds'
Summary
Council members criticized past in-rem foreclosure changes after learning surplus proceeds from prior in-rem auctions were not escrowed and courts found earlier attempts to remit proceeds would have been a gift of public funds, leaving affected homeowners without recourse.
A contentious exchange in the finance committee focused on surplus proceeds from in-rem foreclosures and whether prior council guidance and corporation-counsel advice led to residents losing funds. Council members said they were advised during earlier policy changes that homeowners would still be able to reclaim surplus proceeds; several said those assurances influenced their votes.
Corporation Counsel explained the legal…
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