If you’re behind on your mortgage payments—and your home is in Wisconsin—you might be wondering what happens during a foreclosure in your state. Below you can learn about:
You’ll also learn about significant protections for homeowners in foreclosure, like the 120-day preforeclosure period under federal law and the opportunity to participate in mediation.
Under federal law, in most cases, a loan servicer must wait until you're over 120 days' delinquent before officially starting the foreclosure process. (12 C.F.R. § 1024.41). This preforeclosure period is an excellent time to submit an application to your servicer asking for an alternative to foreclosure. You might be able to stay in your home by working out a repayment plan or modification, for example, or give up the property without going through a foreclosure in a short sale or deed in lieu of foreclosure.
Federal law also provides some other protections to homeowners facing a foreclosure, like a prohibition on dual tracking.
Wisconsin foreclosures are judicial, which means they go through the state court system. To begin the process, the foreclosing bank files a lawsuit. You’ll get notice of the lawsuit when you’re served a summons and complaint. You generally have 20 days to file an answer with the court.
If you fail to answer the suit, the bank can get a default judgment from the court. On the other hand, if you file an answer, the bank can’t get a default judgment. Instead, it will probably file a motion for summary judgment. This motion asks that the court grant judgment in favor of the bank because there’s no dispute about the important facts of the case, your defense lacks merit, or you haven't proven wrongdoing by the bank or servicer. If the court denies summary judgment, then a trial may happen. If the court grants summary judgment (or you lose at trial), the court will enter a final judgment of foreclosure against you. Once the bank gets a judgment against you, the court will order a foreclosure sale.
A notice of the sale must be published in a newspaper, advertised in a public place, and posted on the county website, if there is one, for three weeks before the date of the foreclosure sale. (Wis. Stat. § 815.31).
In foreclosure mediation, the borrower and the bank's representative get together to try to come up with an alternative to foreclosure. Wisconsin’s Department of Justice and Attorney General have helped establish a Wisconsin Foreclosure Mediation Network, and foreclosure mediation is available in participating counties.
Also, several counties in Wisconsin have their own mediation programs. For many of these programs, the bank has to attach a notice about mediation to the complaint, along with an application to participate. (Talk to a local lawyer to find out if your county has a foreclosure mediation program.)
“Reinstating” is when you catch up on the defaulted mortgage's missed payments, plus fees and costs, to stop a foreclosure.
Under Wisconsin law, you have the right to reinstate before judgment. The court will then dismiss the foreclosure. You can reinstate after judgment, which will stay (postpone) the case; but if you miss another payment, the foreclosure can proceed. (Wis. Stat. § 846.05).
Some states allow the borrower to redeem the home within a specific period after a foreclosure. But in Wisconsin, the redemption period takes place before the sale. (Wis. Stat. § 846.13). The redemption period ranges from five weeks to one year, depending on the circumstances, like whether the bank is seeking a deficiency judgment and when you signed the mortgage.
Once the redemption period expires, the sale takes place. Wisconsin law doesn’t provide a post-sale right of redemption.
When the total mortgage debt exceeds the foreclosure sale price, the difference is called a deficiency. Some states allow the bank to seek a personal judgment—called a deficiency judgment—against the borrower for this amount. Other states prohibit deficiency judgments with anti-deficiency laws.
Deficiency judgments are allowed in Wisconsin if the bank requests one in the complaint. (Wis. Stat. § 846.04). The foreclosing bank will often waive the deficiency, though, to shorten the redemption period. (Wis. Stat. § 846.101). (For a summary of the deficiency judgment laws in Wisconsin, see Nolo’s article Deficiency Judgment After Foreclosure in Wisconsin.)
You can stay in the home throughout the redemption period up until the court confirms the sale. If you don’t leave at that time, you'll be evicted. The order confirming the sale may also include a writ of assistance, which is an order from the court directing the sheriff to remove you from the property.
If you want to learn more about the foreclosure process in Wisconsin—or you want to find out if you have any potential defenses to a foreclosure—consider talking to a lawyer. It’s also a good idea to make an appointment to speak to a HUD-approved housing counselor, especially if you want to learn about different ways to prevent a foreclosure.