Paul Clark
In this Blog we open the conversation with
economic loss caused by the current mortgage
crisis.
Wisconsin Foreclosure Law
Quick Facts
- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: Yes
- Primary Security Instruments: Deed of
Trust, Mortgage
- Timeline: Typically 90 days
- Right of Redemption: Yes
- Deficiency Judgments Allowed: Yes
In Wisconsin, lenders
may foreclose on deeds of trusts or mortgages in
default using either a judicial or non-judicial
foreclosure process.
Judicial Foreclosure
The judicial process of foreclosure, which involves
filing a lawsuit to obtain a court order to
foreclose, is used when no power of sale is present
in the mortgage or deed of trust. Generally, after
the court declares a foreclosure, the property will
be auctioned off to the highest bidder. However, in
Wisconsin, no sale may be made for one year from the
date the judgment is entered unless the lender
waives the right to a deficiency, in which case the
delay is six months, or two months if the property
is abandoned. Sales by consent may be earlier.
Non-Judicial Foreclosure
The non-judicial process of foreclosure is used when
a power of sale clause exists in a mortgage or deed
of trust. A "power of sale" clause is the clause in
a deed of trust or mortgage, in which the borrower
pre-authorizes the sale of property to pay off the
balance on a loan in the event of the their default.
In deeds of trust or mortgages where a power of sale
exists, the power given to the lender to sell the
property may be executed by the lender or their
representative, typically referred to as the
trustee. Regulations for this type of foreclosure
process are outlined below in the "Power of Sale
Foreclosure Guidelines".
Power of Sale Foreclosure Guidelines
If the deed of trust or mortgage contains a
power of sale clause and specifies the time,
place and terms of sale, then the specified
procedure must be followed. Otherwise, the
non-judicial power of sale foreclosure is
carried out as follows:
The foreclosure notice must be recorded
with the county prior to the time the first
notice of foreclosure is published. The notice,
which must include the time and place of
sale, must be published once a week for six
consecutive weeks in a newspaper in the
county where the property is located.
The notice must be served upon the borrower
in the same manner that civil process in a
lawsuit is served. In instances where the
borrower can't be found, then the notice
shall be posted in a conspicuous spot on the
mortgaged premises and served on any
occupant.
Said notice must specify the names of the
borrower and lender, the date the mortgage
was recorded, the amount due at the date of
the notice, a property description and the
time and place of sale.
The sale must be held at the time and
place stated in the foreclosure notice. The
winning bidder will receive a certificate of
purchase. If necessary, the sale may be
postponed.
Unless the foreclosure sale has been
confirmed by court order, the borrower has
one year (12 months) to redeem the property
by paying the amount of the highest bid at
the foreclosure sale, plus interest.
Wisconsin law allows a foreclosure sale to be
confirmed by court order. If the lender states their
intentions in the application for sales
confirmation, then they may file a deficiency suit.
Otherwise, deficiency suits are not allowed.
