In assisting in foreclosure proceedings, the U.S. Marshals Service incurs various out-of-pocket expenses associated with the proceedings. Out-of-pocket expenses are defined as those costs incurred for advertising, property appraisals, abstract supplementation and any other services provided by private vendors which are directly related to conducting the foreclosure proceedings. Intrinsic expenses such as U.S. Marshals’ fees, commissions, mileage, per diem, salaries, etc., are assumed by the U.S. Marshals Service to be constructive earnings and are not expenses that are chargeable to the United States Attorneys’ appropriation.

The U.S. Marshals Service will be reimbursed for its out-of-pocket expenses incurred in foreclosure proceedings in either one of two ways. First, when a third (i.e., non-government) party is the successful bidder for the mortgaged property at the foreclosure sale, the bid is paid into the court and a fund is created. The U.S. Marshals Service is reimbursed from this fund for all appropriate expenses incurred before funding is then disbursed to the first lien creditor, then to other creditors in order of priority or to the court for distribution as the court may direct. The United States Attorneys’ appropriation may not be billed by the U.S. Marshals for out-of-pocket expenses incurred in a third-party sale. If the USAO in the district in which the litigation occurred had inadvertently been billed and paid for any of the out-of-pocket expenses associated with the litigation, the United States Attorney should seek reimbursement for payments from the U.S. Marshals Service.

Secondly, in those cases where the government, through the Farmers Home Administration, is the successful bidder at the foreclosure sale, no fund is created. Instead, all out-of-pocket expenses incurred will be properly chargeable to the United States Attorneys’ appropriation. The

U.S. Marshals Service should submit an itemized voucher for appropriate out-of-pocket expenses incurred in a foreclosure proceeding to the United States Attorney in the district responsible for handling the litigation. The United States Attorney must sign the voucher and certify that the charges billed are appropriate for payment.

[updated February 2018]