In Wisconsin, lenders may foreclose
on deeds of trusts or mortgages in default using either a judicial or
non-judicial foreclosure process.
Judicial Foreclosure
The judicial process of foreclosure, which involves filing a lawsuit
to obtain a court order to foreclose, is used when no power of sale
is present in the mortgage or deed of trust. Generally, after the court
declares a foreclosure, the property will be auctioned off to the highest
bidder. However, in Wisconsin, no sale may be made for one year from
the date the judgment is entered unless the lender waives the right
to a deficiency, in which case the delay is six months, or two months
if the property is abandoned. Sales by consent may be earlier.
Non-Judicial Foreclosure
The non-judicial process of foreclosure is used when a power of sale
clause exists in a mortgage or deed of trust. A "power of sale" clause
is the clause in a deed of trust or mortgage, in which the borrower
pre-authorizes the sale of property to pay off the balance on a loan
in the event of the their default. In deeds of trust or mortgages where
a power of sale exists, the power given to the lender to sell the property
may be executed by the lender or their representative, typically referred
to as the trustee. Regulations for this type of foreclosure process
are outlined below in the "Power of Sale Foreclosure Guidelines".
- Power
of Sale Foreclosure Guidelines
- If the deed of trust or mortgage contains a
power of sale clause and specifies the time, place and terms of sale,
then the specified procedure must be followed. Otherwise, the non-judicial
power of sale foreclosure is carried out as follows:
- The foreclosure notice must be recorded with
the county prior to the time the first notice of foreclosure is
published. The notice, which must include the time and place of
sale, must be published once a week for six consecutive weeks in
a newspaper in the county where the property is located.
The notice must be served upon the borrower in the same manner that
civil process in a lawsuit is served. In instances where the borrower
can't be found, then the notice shall be posted in a conspicuous
spot on the mortgaged premises and served on any occupant.
Said notice must specify the names of the borrower and lender, the
date the mortgage was recorded, the amount due at the date of the
notice, a property description and the time and place of sale.
- The sale must be held at the time and place
stated in the foreclosure notice. The winning bidder will receive
a certificate of purchase. If necessary, the sale may be postponed.
- Unless the foreclosure sale has been confirmed
by court order, the borrower has one year (12 months) to redeem
the property by paying the amount of the highest bid at the foreclosure
sale, plus interest.
Wisconsin law allows a foreclosure sale
to be confirmed by court order. If the lender states their intentions
in the application for sales confirmation, then they may file a deficiency
suit. Otherwise, deficiency suits are not allowed.
Click here for more information on Wisconsin foreclosure laws.
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