IMPORTANT NEWS FOR HOMEOWNERS AT RISK OF FORECLOSURE
Under existing Wisconsin law, residential properties in foreclosure typically get a 6 month redemption period
(and 12 months if the mortgage lender is seeking a deficiency balance). The redemption period is the time after a court has entered a judgment
of foreclosure during which a homeowner can take steps to save his or her home before it is auctioned off
There has been buzz since last November that legislation was being drafted to slash those periods in half. That means that instead of 6 months where no deficiency is sought, a homeowner will only have 3 months to act. If a deficiency is sought, a homeowner would have 6 months instead of 12.
2015 AB 720 was formally introduced on January 15, 2016. It’s sister bill, 2015 SB 629 was introduced on January 22, 2016. This is PENDING LEGISLATION. It is not law yet. I will be tracking both of these bills very closely and alerting you to updates as I become aware of them.
The shorter redemption period is a double-edged sword. On the one hand, it does shorten the time a homeowner has to save their home. On the other hand, if a homeowner chooses not to save their home, it shortens the period that the homeowner is burdened with the responsibilities of owning the home, such as insurance and winterization.
The bill also prevents abandoned homes from lingering without a Sheriff’s Sale. After a foreclosure judgment is entered, the property must be sold within 12 months or the mortgage lien must be released and the judgment vacated. However, the bill does not require a mortgage lender to file a foreclosure action after a specified period of delinquency, so so-called zombie mortgages will continue to exist.
For the record, the lobby behind this legislation is the Wisconsin Bankers Association. The bills have been sponsored/co-sponsored by:
Sen. Frank Lasee (Republican – De Pere)
Sen. Duey Stroebel (Republican – Saukville)
Rep. Terry Katsma (Republican – Oostburg)
Rep. Scott Allen (Republican – Waukesha)
Rep. David Craig (Republican – Big Bend)
Rep. Bob Gannon (Republican – Slinger)
Rep. Adam Jarchow (Republican – Balsam Lake)
Rep. Jesse Kremer (Republican – Kewauskum)
Rep. John Macco (Republican – Ledgeview)
If these bills pass and become law, it means that homeowners will no longer be able to drag their heels if they hope to save their homes from foreclosure. If you’re at risk of foreclosure, find out how Chapter 13 bankruptcy
can help save your home
. Contact me today