If you're behind in your mortgage payments and facing a potential foreclosure in Wisconsin, you should how the process works so you aren't caught off guard. To learn valuable information about Wisconsin foreclosure procedures and your rights under both federal and state law during the process, read on.
Federal law usually prevents the servicer from initiating a foreclosure until you're more than 120 days delinquent on the loan. Also, under federal law, servicers are supposed to work with you if you're having trouble making your monthly payments in a loss mitigation process.
If the servicer violates federal law, you could potentially have a defense to the foreclosure.
Wisconsin foreclosures are judicial, which means a court handles the process. The process officially begins when the loan holder (called the "lender" in this article) files a complaint with the court. After the lender files the complaint, you'll be served a copy, along with a summons. You might also receive information about foreclosure mediation. The summons tells you about the suit, how to contact the lender's attorney, and the deadline to file a response to the suit, which is called an "answer." If you fail to file a timely answer, the lender will likely get a default judgment.
But if you respond to the lawsuit, the case will go through the litigation process. The lender might then request the court to grant summary judgment. A summary judgment motion asks that the court grant judgment in favor of the lender because the case's critical aspects aren't in dispute. If the court grants summary judgment for the lender—or you lose at trial—the judge will order the home sold at a foreclosure sale. A notice of the sale must be published in a newspaper for three weeks before the sale. It also has to be advertised in a public place and posted on the county website (if one exists) at least three weeks before the date of the foreclosure sale. (Wis. Stat. § 815.31).
Wisconsin law gives you the right to reinstate the loan before the judgment. The court will then dismiss the foreclosure. You may also reinstate after the judgment (before the sale), which will stay (postpone) the foreclosure; but if you default on payments again, the foreclosure will go ahead. (Wis. Stat. § 846.05).
You also get the right to redeem before the sale. In some states, homeowners who lose their home to a foreclosure get a specific amount of time after a foreclosure to repurchase the property from person or entity that bought the home at the sale. This time period is called a post-sale "redemption period." In Wisconsin, however, the redemption period happens before the sale. (Wis. Stat. Ann. § 846.13).
If the total mortgage debt is more than the foreclosure sale price, the difference is called a "deficiency." Some states allow the lender to get a personal judgment, called a "deficiency judgment," against the borrower for this amount.
In Wisconsin, the lender may request a deficiency judgment in its complaint. But lenders tend to waive the deficiency because doing so shortens the redemption period. (Wis. Stat. § 846.04, Wis. Stat. § 846.101).
You can find the majority of Wisconsin's foreclosure laws in §§ 846.01 through 846.25 of the Wisconsin Statutes. Statutes change, so checking them is always a good idea. How courts and agencies interpret and apply the law can also change. And some rules can even vary within a state. These are just some of the reasons to consult with an attorney if you're facing a foreclosure.
If you need help understanding the law, want to file an answer to the suit, or have questions about your particular circumstances, consider contacting a local foreclosure attorney. Homeowners facing foreclosure are also encouraged to contact a HUD-approved housing counselor.