Foreclosure Law in Wisconsin

Foreclosure is when a lender in Sussex, Wisconsin, re-possesses the real property that was bought with the loan. This is meant to cover the bank's losses, in case the borrower continuously fails to make his or her mortgage payments.

Foreclosure most commonly is a forced sale of a house at auction, since those are the most common types of property bought through a mortgage. Banks will normally try to get rid of the property as quickly as they can, selling it for as much money as they can get in a short period of time.

In every state, including Wisconsin, homeowners have the option to go through what is known as a foreclosure by judicial sale. Essentially, this means a court will oversee the sale of the house to ensure that the bank makes reasonable efforts to sell it for as high a price as possible (to help avoid a deficiency that the borrower may have to pay), and to ensure that any money which might be left over from the sale (after the balance on the mortgage is paid) goes to the borrower.

In many states, mortgages fall into a category of loans recognized as "non-recourse loans." This means that, if the house is sold by the lender, the entire debt is eliminated, even if the sale price was less than the remaining balance on the loan. While the loss of one's home can be personally devastating, treating a mortgage as a non-recourse loan at least means that the homeowner will be more or less free to move on with their life once the property is foreclosed and sold.

How to Possibly Avoid Foreclosure in Sussex, Wisconsin

It's extremely important that you engage in continued communication with your bank. Lenders are surprisingly willing to make accommodations if it means they still get paid something, but in order to accommodate your case, they have to know about it.

You should remember that the bank doesn't really want your house. They approved a mortgage hoping to make a profit from interest, and that's what they'd much rather do. They aren't in the business of buying and managing real estate. Therefore, banks will sometimes go to surprising lengths to accommodate your financial hardship, especially if it's temporary.

Because banks don't specifically enjoy foreclosing, they will probably be willing to work out an alternative payment plan with you, if necessary. Nonetheless, if you think that this might be needed in the near future, you should contact your lender immediately. The sooner they know about it, the more options you have.

Lastly, there is the "short sale." Normally considered a last resort, a short sale results in the borrower losing their home, but discharges almost all of their remaining mortgage debt. If the house is worth far less than the balance of the mortgage, this might be a good choice. In Wisconsin, when a house is sold in a short sale, the proceeds go to the lender. If it sells for less than the mortgage balance, whatever's leftover is forgiven. If it sells for more, the surplus goes to the homeowner.

Can a Sussex, Wisconsin real estate attorney help?

If you are facing foreclosure in Sussex, Wisconsin, and want to do everything practicable to save your house, the assistance of a seasoned real estate lawyer might prove invaluable.