What Happens When a House Goes Into Foreclosure in Wisconsin?

Not paying your mortgage leads to foreclosure and loss of your home.

If you own a home in Wisconsin and default on the mortgage, your lender will likely take your home back through foreclosure. State law allows your home to revert to the lender, but it also gives you some recourse.

Definition and Causes

If you stop paying your mortgage, you will suffer foreclosure. That is when the bank or another lender repossesses your home. Unemployment, health care costs and death and divorce are traditionally the most typical causes of foreclosure in Wisconsin and elsewhere.

The Numbers

Economic recessions often exacerbate mortgage conditions. The foreclosure rate in Wisconsin rose by as much as 62 percent in 2008 alone, according to the Wisconsin Realtors Association. For every 128 homes in the state, one was in danger of foreclosure, ranking the Badger State 28th in the United States.

State Laws

Wisconsin statutes give the courts power to foreclose on homeowners who default on their mortgages. Your mortgage document sets forth the amount and terms of your debt when you finance a home.

Process

Having more house than you can afford can bring foreclosure.

If you don't pay your mortgage for thee months, expect a letter from the lender and then brace yourself for foreclosure to begin. You can expect the process to last about a year in Wisconsin, if you do not contest it in court. The bank or finance company will file a judicial foreclosure in court, which will make final judgment. The home is then auctioned after notification is publicly posted for a given time period. If the home sells for less than what you owe, you may be fined for the difference, called a deficiency payment.

Recourse

In Wisconsin, you have some legal powers if you have defaulted on a mortgage. If you can prove you have money coming in later, you may be granted a forbearance -- a grace period of lower payments or no payments. Perhaps you can also strike an agreement with the lender to adjust the terms or payments to make it easier for you to pay for and keep your home. In addition, the lender may allow a short sale -- selling the home for less than the remaining debt -- which gets the bank out of the transaction with less cost and time and does not hurt your credit rating as much.

References

• Wisconsin Realtors Association: Foreclosure: A Wisconsin Guide
• Foreclosure.com: Learning Center: Wisconsin Foreclosure Laws

Resources

• Wisconsin Statutes: Chapter 846: Real Estate Foreclosure