Source: https://www.nolo.com/legal-encyclopedia/deficiency-judgments-after-foreclosure-wisconsin.html
Timestamp: 2017-09-22 22:43:59
Document Index: 144446427

Matched Legal Cases: ['§ 846', '§ 846', '§ 846', '§ 846', '§ 846', '§ 846']

Deficiency Judgments After Foreclosure in Wisconsin | Nolo.com
Deficiency Judgments After Foreclosure in Wisconsin
In Wisconsin, a foreclosing lender has the right to come after you for a deficiency, but it may have an incentive not to do so.
In Wisconsin, if you go through foreclosure and the sale price is not enough to cover the balance of your mortgage, your lender can come after you for the "deficiency," but it may choose not to. Read on to learn what a deficiency judgment is, when your mortgage lender can collect one against you in Wisconsin and when it might not, and what happens to the deficiency in a short sale or a deed in lieu of foreclosure in Wisconsin.
(For more articles on foreclosure in Wisconsin, visit our Wisconsin Foreclosure Law Center.)
Wisconsin Deficiency Judgments
Foreclosures in Wisconsin are judicial, which means the lender has to go through state court to get one. (To learn more about the difference between judicial and nonjudicial foreclosure, and the procedures for each, see Will Your Foreclosure Take Place In or Out of Court?) The lender initiates the foreclosure by filing a complaint with the court. The complaint is served to the homeowner, along with a summons.
Learn more about the Wisconsin foreclosure process.
Deficiency judgments are allowed in Wisconsin. A lender may obtain a deficiency judgment if it demands one in its complaint (Wis. Stat. § 846.04).
The redemption period is shortened if the lender waives the deficiency judgment. In Wisconsin, the foreclosure sale cannot take place until twelve months after the court enters a judgment to foreclose (Wis. Stat. § 846.10). During this time, the borrower has the right to redeem (reclaim) the property by paying the amount of the foreclosure judgment, plus interest and costs (Wis. Stat. § 846.13). This is called the redemption period. If the lender waives its right to a deficiency judgment, the redemption period is shortened from twelve to six months (Wis. Stat. § 846.101). Because of this shortened period, some lenders may opt not to seek a deficiency judgment against you.
The redemption period is reduced to five weeks if you have abandoned the property (Wis. Stat. § 846.102).
Limitation on amount of deficiency judgment. If the foreclosure sale price is less than the fair market value of the property, the amount of the deficiency judgment is limited to the difference between:
the outstanding debt and
the fair market value of the property (Wis. Stat. § 846.165).
Deficiency After a Short Sale in Wisconsin
In Wisconsin, a lender can get a deficiency judgment following a short sale. To avoid a deficiency judgment, the short sale agreement must expressly state that the lender waives its right to the deficiency. If the short sale agreement does not contain this waiver, the lender may file a lawsuit to obtain a deficiency judgment.
Deficiency After a Deed in Lieu of Foreclosure in Wisconsin
In Wisconsin, a lender can get a deficiency judgment following a deed in lieu of foreclosure. To avoid a deficiency judgment with a deed in lieu of foreclosure, the agreement must expressly state that the transaction is in full satisfaction of the debt. If the deed in lieu of foreclosure agreement does not contain this provision, the lender may file a lawsuit to obtain a deficiency judgment against you.
To find the Wisconsin statutes, go to the State Legislature’s webpage at http://legis.wisconsin.gov. Select “Wisconsin Law,” then “Statutes,” and then “The Wisconsin Statutes & Annotations.” The statutes that govern foreclosures can be found in Chapter 846 (Real estate foreclosure).