Home Foreclosure Process in Wisconsin
In Wisconsin, nearly one out of every five home sales in the first quarter of 2010 was a foreclosure, according to RealtyTrac. If you are one of the homeowners at risk of going through this procedure, you need to understand the process and how it differs from the process in other states. Only by knowing what to expect can you clearly understand your options and what steps you need to take next.
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Mortgages Explained
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In Wisconsin and most other states, financial institutions that provide the money for home purchases use the purchased property as collateral for a home loan. When the loan goes into default because of a failure to pay, the lending organization has the right to take the property in lieu of payment on the loan. This is known as foreclosure.
Foreclosure Methods
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States permit different methods of foreclosure. In Wisconsin, both judicial and nonjudicial foreclosures are permissible. With a judicial foreclosure, the lender must file a lawsuit against the property owner and the courts must decide whether to turn over the property to the lender. With a nonjudicial foreclosure, a clause in the loan agreement gives the lending organization permission to sell the property if the loan goes into default.
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Preforeclosure
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The preforeclosure period begins in Wisconsin when the lending organization submits the paperwork to the courts to start the proceedings. The owner must be served the notification of the impending foreclosure and the foreclosure information must be published in the local newspaper every week for at least six weeks before the sale. If the lender must go through judicial foreclosure, it must wait to put the property up for sale. The waiting period is normally one year. If the lender does not want to pursue a deficiency judgment against the owner (meaning the lender will sue the owner for the difference between the mortgage balance and the auction price of the home), then the home can be sold six months after the courts enter their judgment. If the property has been abandoned, only a two-month waiting period is necessary. No waiting period is required if the owner consents to have the home sold.
Post-Foreclosure
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In Wisconsin, the sheriff presides over the auction of a foreclosed home. The auction is open to everyone, but you cannot bid unless you have 10 percent of the total you bid on hand to pay to the sheriff as a down payment on the property. The balance must be paid in full within 10 days.
Length of the Process
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Because of the waiting period, Wisconsin's foreclosure process is one of the longest in the United States. The entire length of the process can take up to 290 days to complete. Following a nonjudicial sale, the original owner has 365 days to reclaim the property by paying the full amount due, plus interest, ro the winner of the auction. This redemption period can be waived if the lender agrees not to seek a deficiency judgment or if the sale is confirmed by a court in Wisconsin.
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