Foreclosure Laws of Wisconsin
If you are a Wisconsin homeowner struggling to make your mortgage payment, you may be concerned about the foreclosure process and your rights. Foreclosure is scary and complicated. In Wisconsin, a lender can foreclose on a deed of trust or mortgage through either a judicial or nonjudicial foreclosure. The process typically takes 90 days.
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Judicial Foreclosure
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Most foreclosures are executed through the court in Wisconsin. In a judicial foreclosure, the lender files a lawsuit against the homeowner for permission to foreclose the home The lender files a complaint at the courthouse in the county where the home is located. As a borrower, you must respond to the complaint by filing a written answer. Failing to respond results in the lender making a final judgment. If the lender proves the homeowner is in default, the court issues a judgment of foreclosure. After the judgment, you have until the restatement period expires to pay the entire balance owed plus fees determined by the court. The reinstatement period can be as short as two months or as long as a year.
Nonjudicial Foreclosure
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If a power of sale clause exists in the deed of trust, the lender does not need to foreclose judicially. The power of sale clause allows the lender to sell the home when the borrower defaults. The foreclosure process begins when the lender records a notice of foreclosure at the county recorder's office. Borrowers are served with the notice of foreclosure, the same as in a court foreclosure. If the homeowner cannot be located, the notice is posted in a conspicuous spot on the property. The notice also is published in a local newspaper for six consecutive weeks prior to the sale date. Either the lender or an appointed representative known as a trustee oversee the foreclosure sale.
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Deficiency Judgment
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Lenders can choose to seek a deficiency judgment to collect the difference between the sale price and the amount you owe on the loan. If the court grants the judgment, the lender has permission to obtain the money by any means necessary, including garnishing your wages. Wisconsin law allows garnishment of up to 20 percent of your earnings. If the loss of income causes you to fall below the federal poverty level, only the amount in excess of the poverty line can be garnished.
Redemption Right
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Certain homeowners are given the option to purchase the home back after a foreclosure sale. If the sale of the home is not confirmed by the court, the homeowner has 12 months to redeem the home by paying the entire loan balance along with related fees and costs. The lender can request the court confirm the sale, which ends the redemption period at the time of confirmation. If the lender agrees to waive the right to deficiency, the redemption period is shortened to six months.
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