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. (To learn what to do—and what not do—if you’re facing a foreclosure, see Foreclosure Do’s and Don’ts.)
Federal law usually prevents the servicer from initiating a foreclosure until you’re more than 120 days delinquent on the loan. (To learn more about the law that delays the beginning of a foreclosure for 120 days, see How Soon Can Foreclosure Begin?)
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. (“Loss mitigation” is what the mortgage servicing industry calls the process of working with the borrower to avoid a foreclosure.) (To learn more about federal mortgage servicing laws, see Federal Laws That Protect Homeowners During Foreclosure.)
If the servicer violates the 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. The summons tells you about the suit, how to contact the lender’s attorney, and that 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. (To learn what generally happens if you file an answer in a foreclosure lawsuit, see Should You File an Answer to a Foreclosure Lawsuit?)
Once the lender gets a judgment against you, the court will order the sale. A notice of the sale must be published in a newspaper, advertised in a public place, and posted on the county website for three weeks prior to 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 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). (To get details about the right of redemption in Wisconsin, see Can You Get Your Home Back After a Wisconsin Foreclosure?)
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.
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). (For a summary of the deficiency judgment law in Wisconsin, see Deficiency Judgments After Foreclosure in Wisconsin.)
You can find the majority of Wisconsin’s foreclosure laws in §§ 846.01 through 846.25 of the Wisconsin Statutes. (To learn how to look up foreclosure laws, see How to Find the Foreclosure Laws in Your State.)
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.