Wisconsin foreclosure laws allow lenders to sue borrowers for default mortgage payments under judicial foreclosure and non-judicial foreclosure. Judicial foreclosures occur when mortgages or deeds of trusts documents do not contain power of sale provisions. Therefore, mortgage lenders must initiate lawsuits to foreclose on properties. The process starts with the lender or its representative delivering a notice of the foreclosure filing to the borrower and other lien holders.
The court reviews the file and determines if the borrower defaulted on the loan. If the court finds the borrower in default, it issues an order for a foreclosures auction, which takes place a year from the date of the foreclosure order—if the lender waives its right to seeking a deficiency judgment against the borrower. Wisconsin foreclosure laws permit the sale of vacant foreclosed properties within two months. In cases where lenders and borrowers agree, mortgage lenders can sell foreclosed homes sooner.
Out of Court Foreclosures
Non-Judicial foreclosures take place under Wisconsin foreclosures laws when a mortgage or deed of trust documents has a power of sale clause. The provision gives lenders pre-approval to sell the property at auction if the buyer defaults on the mortgage. When the power of sale contains information on the location, time and terms of the sale, Wisconsin foreclosures laws permit the lender to use that process.
Notice of Sale
When the notice of sale does not have precise instructions on carrying out the sale, mortgage lenders must follow the Wisconsin foreclosure laws as outlined below:
1) The mortgage lender must record the notice of sale and serve the borrower with a copy of the notice. The lender must also publish the notice for six straight weeks in a newspaper that has general circulation in the county where the foreclosed property is located. If the mortgage lender cannot locate the borrower it must place the notice in a conspicuous area on the property and served any person occupy the property.
2) The foreclosure sale has to take place at a public auction at the time and location specify in the notice of sale, Wisconsin foreclosure laws allow for the postponement of an auction sale.
The winning bidder must pay 10% of the bid to the sheriff. Winning bidders receive a Certificate of Purchase. Wisconsin foreclosure laws only permit lenders to file for deficiency judgments on foreclosure homes if the lender revealed its intentions in the initial court filings.