Wisconsin Foreclosure Procedures
Wisconsin is a lien theory state. This means that, according to Wisconsin statutes, the borrower is considered to own the property. The mortgage contract is a lien on the property, which will be removed once the loan is paid in full. If the loan is not paid in full, foreclosure may result. In Wisconsin, the foreclosure process is generally completed within one year. This is shortened to six months if the lending agent waives the right to a deficiency judgment, or two months if the property is abandoned.
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Judicial Foreclosure
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The judicial foreclosure is one of two methods that Wisconsin recognizes. This process requires the lending agent to file a lawsuit against the borrower. The court will generally set a deadline for the past due payments to be made. If the borrower is still not able to pay the past due amount, then the court will issue a foreclosure order, and the home may be sold to the highest bidder.
Power of Sale Foreclosure
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If the lending agent adds a power of sale clause to the loan agreement, then a foreclosure may be implemented without court intervention. The power of sale clause typically provides all the details required to carry out the foreclosure. If this does not occur, then Wisconsin's requirements become effective. The lending agent must file a foreclosure notice with the clerk in the county in which the home is located. Once this is accomplished, the lender must place an advertisement in the local newspaper at least once per week for six weeks in a row.
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Last Chance
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Wisconsin gives the borrower one final opportunity to keep the property after the sale. The law gives the borrower one year from the date of the sale to pay an amount equal to the highest bid, plus any applicable interest. This is referred to as the right of redemption.
Deficiency
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If the property is sold for less than the amount that is due on the mortgage loan, then a deficiency has occurred. Wisconsin only allows the lending agent to seek payment of the difference if he states this request when filing an application for the court to confirm the sale. If the deficiency judgment is not requested at this time, the lender may not file a deficiency suit at a later date.
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