Wisconsin Foreclosure Laws & Process Overview

Wisconsin Pre-foreclosure Period

The pre-foreclosure period in Wisconsin begins when the lender files the necessary documents with the court. The lender must also notify the borrower and any other parties with an interest in the property. This period allows the borrower to be informed and take necessary actions before the foreclosure ruling is made by the court. 

Types of Foreclosures

In Wisconsin, most foreclosures are handled through the courts, as required by the provisions of the Wisconsin Statutes on most property loans. This means that from start to finish, a court oversees the foreclosure process. This legal approach ensures that foreclosures are carried out in a structured way, under legal rules, protecting both the lender and the borrower.

Notice and Sale Process in Wisconsin

The local sheriff is responsible for giving notice of the time and place of the foreclosure sale, either as per the law or as instructed by the court. During the sale, the purchaser is allowed to make a down payment of $100 (if the total value of the property is greater than that) to the sheriff. Within 10 days post-sale, the sheriff must submit a report of the sale to the court clerk. After the auction sale is over, the purchaser may pay the balance of the purchase price to the court clerk.

Avoiding Foreclosure by Selling Your Mortgage Note

For homeowners in Wisconsin facing foreclosure, selling their mortgage note to a reputable note buyer can be a viable option. This alternative can help avoid the foreclosure process, along with its negative impacts on credit scores and the potential loss of property.

Borrower Rights and Protections

Wisconsin law allows a reinstatement period for borrowers to stop the foreclosure by paying off the amount owed. This period varies based on several factors, including the mortgage date and terms, parcel size, and occupancy status. Borrowers have rights under Wisconsin law to be informed and have the opportunity to reinstate their mortgage.

Redemption and Deficiency Judgments

In Wisconsin, abandoned properties have a 5-week redemption period. Unoccupied properties have a redemption period of six months if the lender pursues a deficiency judgment after the foreclosure sale. Where the lender waives their right to a deficiency judgment, the borrower has a redemption period of three months. 

Finally, occupied properties have a redemption period of 12 months if the lender brings an action for a deficiency judgment. The borrower will have only 6 months to redeem the property if the lender doesn’t pursue a deficiency judgment. 

Please note that the court renders a deficiency judgment if it’s satisfied that the sale price of the property is fair, but it’s less than the owed amount and sale costs. 

Special Protections and Programs in Wisconsin

In Wisconsin, there aren’t any special state programs for people facing foreclosure, just the regular legal steps and basic borrower rights. Homeowners have to rely on these standard laws and rights. This means they don’t get extra help or specific programs for foreclosure that might exist in other states. 

Avoiding Foreclosure by Selling Your Mortgage Note

Homeowners in Wisconsin facing foreclosure can consider selling their mortgage note to a reliable buyer. This choice can help them avoid foreclosure and its downsides, like harming their credit score and losing their home.

How Wisconsin Compares to Other States

Wisconsin's judicial foreclosure process takes significantly longer than most states. Here is how it compares:

The numbers tell the story — Wisconsin's process is significantly slower and more expensive than non-judicial states like Texas. On top of that, the 12 months redemption period means the process does not end at the auction. From our experience, note holders in Wisconsin often find that selling the note outright is a better use of their time and money than waiting out a long foreclosure.

Impact on Credit Score

A foreclosure typically results in a decrease of 100 points or more in credit scores. This consequence that is uniform across states in the US, including Wisconsin. 

Conclusion

Knowing your options and having the right resources at your disposal is essential for tackling foreclosure effectively. For homeowners in Wisconsin, one of such options is selling their mortgage notes. This way, they can avoid the downsides of foreclosure, which include reductions in their credit scores.