Wisconsin Foreclosure Laws

While Wisconsin foreclosure laws allow for judicial and non-judicial foreclosure proceedings, the vast majority of foreclosures in the state are judicial. The entire process period for most foreclosures is 290 days.

Initiating Foreclosure is Wisconsin

Generally, lenders in Wisconsin will send a warning letter or otherwise warn debtors that foreclosure filings may take place. To initiate a Wisconsin foreclosure, the lender must file the correct documents in court. In addition, the lender needs to have a notice of the filing delivered to lien holders, the debtors, and other parties involved. This allows the court to rule ion the foreclosure. The court will determine whether a foreclosure is needed. The court will also determine amount to be paid to the lender in the event of a foreclosure. This amount can include not only default or loan balance amount but also the tax costs, legal fees, repair expenses and insurance costs the lender has had to pay on the property.

If the court rules in favor of the lender and allows foreclosure, the debtor is given a grace period, known as a reinstatement period. During this period, the debtor can pay off the amount owing and stop the foreclosure. The occupancy of the property, the size and value of the property and terms of the mortgage or deed of trust usually determine the length of the reinstatement period, which can vary widely. Abandoned real estate may have a reinstatement period of only two months, while occupied property may have a reinstatement period of six months or even a year.

The Foreclosure Auction in Wisconsin

The sale date of a property is determined either by a court or by local laws. The sheriff will declare the location and time of the auction. Usually, the auction can occur only after the reinstatement period. At least ten months after the court has ruled on the foreclosure, the first publication of the notice of sale must take place. In some cases, the parties involved decide to agree to a sale earlier than the reinstatement period would normally allow.

The sheriff is responsible for overseeing the foreclosure auction. Anyone who has at least 10% of their bid with them at the auction may place a bid on the property. The 10% deposit needs to be paid to the sheriff. Once the winning bidder is determined, the sheriff has ten days to file a sale report and give the auction proceeds to the clerk of the court. The court must confirm the sale and once this is done, the clerk distributed the proceeds of the auction to the correct parties and gives the winning bidder a deed that transfers ownership of the property. The bidder must pay the balance of the winning bid within ten days after the court has confirmed the sale. If the bidder fails to do this, he or she loses the deposit, which is paid to the lender. A sale is then held again. If the court us unable to confirm a sale, the bidder's deposit is refunded and another sale is scheduled.

If the proceeds of the auction are greater than the amount owed on the property, junior lien holders will file a notice with the clerk of court. The court will then rule as to who will get the extra proceeds. If the winning bid at an auction is less than the amount of the default plus the expenses the lender has incurred, the court will usually not confirm the sale.