Wisconsin Foreclosure Information
Foreclosure occurs when the lender on a mortgage loan reclaims the property due to the inability of the borrower to make the payments agreed upon in the contract. In Wisconsin, this process typically requires one year to complete, unless the lender chooses to waive certain rights, in which case it may take six months. If the borrower chooses to contest the foreclosure, the process could take longer.
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Judicial Foreclosure
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Wisconsin offers two methods for initiating foreclosure proceedings. One is referred to as a judicial foreclosure. This requires the lender to file a lawsuit against the borrower with the intention of obtaining a court order to foreclose on the property. Wisconsin law requires that once this order is issued, the lender must wait one year to auction the property. This may be reduced to six months if the lender waives his right to deficiency. If the property is abandoned, then the waiting period is reduced to two months.
Nonjudicial Foreclosure
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A nonjudicial foreclosure allows the lender to foreclose on the property without the need for a court order. This requires that the lender include a power of sale clause in the contract, which states the terms under which the property may be foreclosed upon. The lender typically appoints a representative, also referred to as a trustee, to oversee this process.
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Power of Sale
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The power of sale clause typically outlines the procedures that apply once the foreclosure process has begun. If this information is not present in the contract, then Wisconsin requires certain minimum standards to be met. Wisconsin requires that the foreclosure notice be filed with the county before the first public notification is made. Once this is done, then a local newspaper must publish the notice for at least six successive weeks.
Right of Redemption and Deficiency
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The state of Wisconsin provides for a right of redemption, which allows the borrower to reclaim the home by paying the full balance of the loan, plus any foreclosure costs and fees. In Wisconsin, the borrower has one year from the date of the sale to redeem the property, unless the sale is confirmed by a court order. A deficiency occurs when the home sells for less than the balance due on the loan. In Wisconsin, the borrower may be held liable for paying the difference.
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