Every homeowner who has not paid off their mortgage has thought about what would happen if things went wrong financially and they got their home foreclosed. It can be tough to hear someone want to take the home you have built for yourself and your family away from you. Foreclosure is an incredibly stressful event, and obviously, if you get notice of default or are even served with papers filled out by your lender, you will have many questions. Read on to find out more about the Wisconsin foreclosure process.
How Long Does It Take For A Home To Foreclose In Wisconsin?
The first question most homeowners have once they realize they are in danger of being foreclosed on is, how long will the foreclosure process take? This is vitally important because the homeowner needs time to plan either a way to avoid a final order of foreclosure or where they will go once the foreclosure is complete. Generally, a foreclosure in Wisconsin can take anywhere from 6 months to 18 months, depending on what type of property it is and whether or not the parties both actively participate in the foreclosure. That means if the borrower actively fights the foreclosure and makes some good arguments, it may slow down or even stop the process. If the parties agree to go to mediation, that can also buy the homeowner some time. The critical thing to remember is that you should not try to defend your foreclosure alone. You should at least consult with an experienced Wisconsin foreclosure defense attorney to see if you have a case and what your options are.
Wisconsin Foreclosure Process-a Brief Breakdown
Here are the things that have to happen from start to finish in a Wisconsin foreclosure:
- Default of loan, the borrower did not pay, and typically some notice of default is sent out by the lender along with an offer to resolve.
- Filing of summons and complaint for foreclosure
- Service to the borrower
- Borrower has 20 days to answer
- Hearing in front of a judge, they may be more than one depending on what is included in your answer and if you have any defenses
- redemption period
- sheriffs' sale of the property
- confirmation of sale by the court
- removal of residents and property by the sheriff’s department if necessary (most people have already left home)
Wisconsin is a Judicial Foreclosure State
Some states allow what is known as non-judicial foreclosure, which means that the lender can simply foreclose on your home without involving the court. Wisconsin is not one of those states. In Wisconsin, the lender must initiate legal proceedings with a complaint for foreclosure. You will be entitled to proper notice of the filing and a reasonable opportunity to file an answer. You will have 20 days from the date you are served the filed complaint to file your answer. If you plan to fight foreclosure, this is the time when you should make arrangements to meet with an experienced Wisconsin foreclosure defense attorney who can evaluate your situation and offer you a road map toward trying to keep your home. Thankfully, in Wisconsin, foreclosure proceedings are heard by the court in equity, which means in plain language that the court can listen to what your situation is and do what the court thinks is equitable for the parties. While that is by no means a “get out of jail free card,” it does show that the court is willing to try and help people keep their homes if possible.
What Is The First Step In The Foreclosure Process?
The first step in the foreclosure process in Wisconsin is that the lender files a complaint for foreclosure in the appropriate court. Typically, your mortgage agreement includes what kind of notice you are entitled to if you default on your home loan. If you take no action after the notice of default and do not attempt to work with your lender, they will proceed with preparing and filing a complaint for foreclosure. You will have 20 days from the service date to file an answer, and the court will set the matter up for a hearing.
What is included in your answer can count for a lot here. The terms of your loan agreements and if notice of default was proper are possible issues your attorney could bring up. Furthermore, many counties in Wisconsin offer foreclosure mediation, which can buy you some time. If the parties attend mediation to try and avoid foreclosure, not only does it extend the time for the foreclosure process to be completed, but there is a strong possibility that you and your lender can reach some type of agreement to keep the loan in place and allow you to stay in your home.
If you cannot reach an agreement with the lender or if the lender receives a foreclosure from the court, you will still have some time before you lose your home. The time between the judicial order of foreclosure and the actual time you have to leave your home is known as the redemption period.
Wisconsin Redemption Period
The right of redemption, also known as the redemption period, can vary slightly in Wisconsin. All redemption periods start when the judgment of foreclosure is entered. Typically, if it is a residential property, you have six months to try and arrange to keep your home. That can mean finding a second lender who will front you the money to get your original home loan back on track, which is difficult but not impossible. If you are trying to sell the home yourself, you can petition the court to extend the redemption period to eight months as long as you can show that you are working with a licensed real estate agent listing the house. Sometimes, the redemption period for a residential home can be twelve months if the lender gave that in the original loan documents. Check your home loan paperwork carefully, and you should find the redemption period listed. Another place where you can look for any extended redemption period is in the complaint for foreclosure, which you should have a copy of. These redemption rules are for mortgages executed in Wisconsin before April 27, 2016. If you have a mortgage entered into after April 27, 2016, the redemption periods change slightly and become three months if the lender waives a deficiency judgment or six months if the lender wants a deficiency judgment.
A deficiency judgment is where the lender asks that the borrower be responsible for any deficiency if there are still funds that the lender has not recovered after the home is resold. For instance, if your loan is $150,000 and the lender forecloses on your home and then sells it for $125,000, the lender could ask that the court hold you responsible for the difference of $25,000, otherwise known as the deficiency. Again, you should read any home loan documents carefully before signing them, and it would not be a bad move to have an attorney sit down and explain anything you do not understand or recognize before signing them.
If the borrower abandons the property by moving out before the foreclosure is complete or the redemption period begins to run, the redemption period can be as short as five weeks or as long as twelve months, depending.
Getting the news that your lender will start foreclosure is something no one wants to hear, but it always happens. The bottom line is that Wisconsin is one of the more equitable states for borrowers who have trouble paying their home loans. Wisconsin does offer mediation programs to see if an arrangement can be made between lenders and borrowers. Wisconsin also offers judicial foreclosures, offering borrowers an opportunity to defend themselves before a foreclosure order is entered. Even if Wisconsin enters an order for foreclosure, it gives the borrower additional time to try and fix the problem and keep their home. The best first step to take when you believe you are in danger of being foreclosed on is to contact an experienced Wisconsin real estate attorney who can see to it that your rights are represented, and every possible defense to foreclosure explored. If you think you are in danger of being foreclosed on, feel free to give O’Flaherty Law a call, we would be happy to help you.
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