Cecily Zamora
Foreclosure laws in Wisconsin are complex and changeable, with some rules varying within the state. Wisconsin law allows for a redemption period before the foreclosure sale, which can range from five weeks to one year. During this time, the owner can redeem the property by paying delinquent taxes, special assessments, interest, penalties, and other charges. After the redemption period, a court hearing is held, and the county obtains complete ownership of the properties. Wisconsin also permits lenders to obtain a deficiency judgment for the difference between the sale price and the total debt. Errors or omissions by lenders or servicers may provide a defence against foreclosure, and mediation programs are available in some counties.
| Characteristics | Values |
|---|---|
| State law | Wisconsin State Law provides for the transferring of titles to land when taxes are delinquent. |
| County law | Oconto County and Sauk County utilize the "In Rem" Foreclosure process, Ordinance O2021-02-01, of taking parcels by tax deed State Statute Chapter 75.521. Lafayette County also uses the "In Rem" process. |
| Tax certificate | On September 1st of each year, Oconto, Sauk, and Lafayette Counties issue a Tax Certificate for each parcel of real property for which there are unpaid taxes, interest, penalty, special assessments, and/or special charges as of August 31st. |
| Redemption period | Wisconsin law requires a redemption period of at least 8 weeks after the foreclosure action is first published. During this time, owners or interested parties may "redeem" the property by paying delinquent taxes and other charges. The redemption period ranges from 5 weeks to 1 year depending on circumstances. |
| Foreclosure sale | Once the redemption period expires, the foreclosure sale takes place. Wisconsin law does not provide a post-sale right of redemption. |
| Deficiency judgment | Wisconsin allows the lender to obtain a deficiency judgment if the foreclosure sale does not bring in enough money to pay off the full amount owed. |
| Foreclosure mediation | Wisconsin's Department of Justice and Attorney General have established a Foreclosure Mediation Network, and several counties in Wisconsin have their own mediation programs. |
| Legal advice | It is recommended to consult with an attorney or legal aid office to understand your rights and alternatives to foreclosure. |
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What You'll Learn
In Rem Foreclosure Action
In Wisconsin, when property owners do not pay their real estate taxes, Wisconsin law permits counties to enforce the tax lien in order to collect the delinquent taxes. This is known as an "In Rem" foreclosure action. Oconto County and Sauk County in Wisconsin are examples of counties that utilize the "In Rem" foreclosure process.
When an "In Rem" foreclosure action is filed, a list of all properties being foreclosed upon is filed with the Clerk of Court, along with a Petition for a Judgment of Foreclosure transferring legal title to each parcel in the list to the county. Notice of the foreclosure action is sent to the last known address of all owners, lenders, and other persons, entities, or units of government with secured interests in the property. Notice is also sent to the municipalities in which the properties are located. Notice of the foreclosure action and the list of properties are also published in the local newspaper for three consecutive weeks.
Wisconsin law requires a redemption period of at least eight weeks after the foreclosure action is first published. During this redemption period, any owner or interested party may "redeem" the property (that is, take it off of the foreclosure list) by paying the delinquent taxes along with any special assessments, special charges, interest, penalties, and other additional charges that have accrued for the year of the Tax Certificate. There may be other charges that must be paid before a property is redeemed. An attorney, known as a Guardian Ad Litem (GAL), is appointed by the court to determine if any party with an interest in a listed parcel may be incompetent or a minor. Each party entitled to receive notice also has the right to file a written answer to the action. The kinds of defenses that can be raised and the time period during which an answer can be filed are limited by statute.
After the redemption period has expired, a court hearing is held. Generally, a judgment of foreclosure will be granted by the court for every parcel that remains on the list at the time of the hearing. At that point, the county obtains complete ownership of the properties in the foreclosure list. With the exception of easements and mineral rights, all prior ownership interests, liens, secured interests, etc., are extinguished forever. The proceeds of the sale are used to pay towards delinquent taxes, special charges, interest, and penalties. In cases where the property was a homestead, the former owner may be entitled to receive some of the proceeds from the sale of the property, provided certain conditions are met.
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Redemption period
Foreclosure is a process that allows a lender to sell a property and use the proceeds to repay the amount borrowed, plus fees and costs, when the borrower stops making mortgage payments. In Wisconsin, the redemption period happens before the sale.
The redemption period is a specific amount of time before the sale, during which the owner can stop the foreclosure by paying off the total amount of mortgage debt, delinquent taxes, special assessments, special charges, interest, penalties, and other additional charges that have accrued for the year of the Tax Certificate. The length of the redemption period varies depending on several factors, such as whether the lender is seeking a deficiency judgment or whether the borrower abandoned the home. If the lender waives the right to a deficiency judgment, the redemption period is shortened to three months. However, the borrower may request an extension of the redemption period to five months if they are actively trying to sell the property with the help of a licensed real estate broker.
In the case of In Rem foreclosure, which is used in Oconto and Sauk Counties, Wisconsin law requires a redemption period of at least eight weeks after the foreclosure action is first published. During this time, any owner or interested party may "redeem" the property by paying the delinquent taxes and associated charges. After the redemption period expires, a court hearing is typically held, and the county obtains complete ownership of the properties remaining on the foreclosure list.
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Foreclosure sale
Foreclosure is a complex process, and Wisconsin's foreclosure laws have changed significantly in recent years. It is always recommended to consult with an attorney if facing foreclosure.
In Wisconsin, the redemption period—during which an owner can "redeem" their property by paying delinquent taxes and other associated fees—takes place before the foreclosure sale. This period can range from five weeks to one year, depending on the circumstances. After this redemption period expires, a court hearing is held, and a judgment of foreclosure is granted for each parcel that remains on the list. At this point, the county obtains complete ownership of the properties.
Wisconsin law does not provide a post-sale right of redemption. If a foreclosure sale does not bring in enough money to pay off the full amount owed on the loan, a lender can request a "deficiency judgment" for the remaining amount, known as the "deficiency balance." However, lenders often waive this right to shorten the redemption period.
Counties in Wisconsin may use different processes for foreclosure. For example, Oconto and Sauk counties utilize the In Rem foreclosure process, where a list of properties being foreclosed upon is filed with the Clerk of Court, along with a petition for a judgment of foreclosure. Notice of the foreclosure action is sent to the last known address of all owners and lenders, and it is also published in the local newspaper for three consecutive weeks.
If you are facing foreclosure, there are resources available to help you understand your rights and explore alternatives. These include consulting with a local foreclosure attorney or legal aid office, as well as seeking assistance from a HUD-approved housing counselor.
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Deficiency judgment
Foreclosure is a legal process in which a lender sells a borrower's property to repay the outstanding debt in case of default on mortgage payments. Foreclosure laws vary across states in the USA. In Wisconsin, foreclosures are judicial, meaning the lender must foreclose through the state court system. Foreclosure sales often result in a deficiency, where the lender bids less than the borrower's total mortgage debt. In such cases, the lender can seek a personal judgment against the borrower to recover the difference, known as a "deficiency judgment".
In Wisconsin, the lender may obtain a deficiency judgment as part of the foreclosure if demanded in its complaint. However, the state has laws in place to protect borrowers. Firstly, Wisconsin law limits the amount of the deficiency judgment to the difference between the property's fair market value and the foreclosure sale price. This ensures that borrowers are not held liable for excessive amounts. Secondly, the law incentivizes lenders to waive their right to a deficiency judgment by offering a shorter redemption period before the sale. This redemption period allows borrowers to stop the foreclosure by paying off the full amount of the mortgage debt, including interest and costs.
The specific process for obtaining a deficiency judgment in Wisconsin is as follows:
- The lender files a lawsuit asking the court for an order to allow a foreclosure sale.
- The lender serves the borrower and any other defendants with a summons and complaint, notifying them of the suit.
- If the lender chooses to seek a deficiency judgment, it must demand one in its complaint.
- After fulfilling all legal requirements, the lender conducts the foreclosure sale, typically through a public auction.
- If a deficiency exists after the sale, the lender can attempt to collect the deficiency balance using methods such as wage garnishment or a bank account levy. Alternatively, they can sell the debt to another party.
It is important to note that the laws and processes surrounding deficiency judgments can be complex and may change over time. Consulting a lawyer is advisable for those facing foreclosure or seeking detailed information on their rights and options.
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Foreclosure mediation
In Wisconsin, several counties offer foreclosure mediation programs to assist homeowners facing foreclosure. For example, Fond du Lac County has a Foreclosure Mediation Program where homeowners can request mediation within 15 days of receiving a summons. The county also provides homeowners with housing counselors who can help them gather information and prepare a proposal for the mediation meeting. Similarly, Sauk County has a foreclosure mediation program administered by the Wisconsin Foreclosure Mediation Network, which offers a confidential and voluntary process for homeowners and lenders to discuss ways to resolve foreclosure cases, such as reinstating or modifying loan terms. Oconto County and Sauk County also follow the "In Rem" foreclosure process, which allows counties to enforce tax liens and collect delinquent taxes by taking parcels by tax deed.
To initiate the foreclosure mediation process, homeowners typically need to fill out an application form and submit it to the relevant county or organization offering the mediation program. Homeowners are encouraged to consult with an attorney, although it is not mandatory. During the mediation session, all homeowners must be present in person, while attorneys can attend in person or via video conference. Representatives of the lender and loan servicers may attend by telephone or in person. Both homeowners and lenders usually pay a fee for the mediation process, which can vary by county.
It is important to note that even during the mediation process, homeowners must comply with all mandatory deadlines set by the court and continue to answer any complaints or filings. Failure to do so may result in the court granting judgment against the homeowner, leading to potential loss of rights in the case. While mediation offers a potential solution to avoid foreclosure, it does not pause the legal proceedings. Therefore, homeowners should carefully consider their options and seek legal advice when facing foreclosure.
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Frequently asked questions
The redemption period in Wisconsin ranges from five weeks to one year, depending on the circumstances. This period takes place before the sale, unlike in some other states where homeowners can redeem the property after the foreclosure sale.
After the redemption period expires, a court hearing is held. A judgment of foreclosure is granted by the court for every parcel that remains on the list. The county then obtains complete ownership of the properties.
The "In Rem" foreclosure process is a method of taking parcels by tax deed. When property owners do not pay their real estate taxes, Wisconsin law permits counties to enforce the tax lien to collect the delinquent taxes. On September 1st of each year, counties like Oconto and Lafayette issue a Tax Certificate for each parcel of real property with unpaid taxes as of August 31st. If there are still unpaid taxes two years after the certificates are issued, the county can initiate foreclosure.
