Foreclosure: Timing is Everything
THIS ARTICLE ONLY PERTAINS TO WISCONSIN RESIDENTS
Question: We already know we aren’t keeping the house and we can’t afford to make any more payments toward the mortgage. How much time will we have to stay in the house until we get kicked out?
How much time you have left to stay in your home when facing a foreclosure lawsuit depends on a few key facts, but in Wisconsin, it won’t happen overnight. Wisconsin is a state where you own the home until a foreclosure order is signed or ‘confirmed’ by a county judge. Several months elapse between the first time you receive notice that you are behind, and the confirmation order. The sheriff or other party cannot enter the premises to remove you until after the confirmation order is signed.
Foreclosure Process (Ultra Short Version)
1. Breach Letter. A certified letter will arrive warning you of their intent to foreclose and they will invite you to pay to get current, “or else.” (The “else” follows)
2. Summons and Complaint. Handled like any other civil case. Always file an Answer and have an experienced attorney look for all possible defenses to your case. RESPA, TILA, HOEPA and other consumer protection laws can help, especially if your mortgage originated in the era of ‘fast and loose’ lending.
3. Judgment. Failure to file an answer, or a successful defense, may result in a judgment for the mortgagor.
4. Publication. There is a time period established by statute that requires publication of the foreclosure sale.
5. Sale. This is your last chance to find funds to buy the house. It is rare, but some folks have been able to save their home at the foreclosure sale.
6. Confirmation. Once the sale is complete, the judge reviews the paperwork to see if all the statutes were followed concerning the foreclosure, publication, notice and sale.
7. Deed. The deed is transferred to the highest bidder at the sale (which is the bank in a vast majority of cases.)
8. Eviction. Once the deed is transferred, the successful bidder now has the option of evicting anyone who remains in the home. I hope you can see that the foreclosure process does not happen overnight. The stories you may hear of couples living in foreclosed homes for over a year, are likely true. After all, some banks may have trouble selling the homes they repurchased in foreclosure and would rather have folks in the house keeping the pipes warm and tending the property.
Timing Depends on Facts
Real Estate Foreclosure is governed by Chapter 846 of the Wisconsin Statutes. The statutes specify how much time must elapse before certain actions can be taken during foreclosure. For residential property, the timing of the foreclosure depends on one of the following three fact categories:
1) House is abandoned. (Two month redemption period)
2) House is occupied and the lender does not seek to sue the homeowner for money during the foreclosure (Six month redemption period)** MOST COMMON
3) House is occupied and the lender wants to sue the homeowner for money during the foreclosure (One year redemption period) The redemption period is the time from judgment (Step 3, above) to sale (Step 5, above.) The law encourages lenders who wish to have a quick return of the property, to forgo suing the homeowner for money damages (deficiency.)
The law also encourages folks who are faced with a foreclosure not to abandon the house.
The Sale, Confirmation and Eviction
Once sold, the Sheriff has up to 10 days to report the sale, and the foreclosure attorneys must schedule a hearing with the court to confirm the sale, and must allow at least 5 days of notice to all parties in interest prior to said hearing. Don’t forget that an eviction action is a separate proceeding with it’s own time line. The fastest evictions are in the range of two to three weeks, if all the hearings, notices and service fall in place.
Commencement of the Case Depends on Contract
The commencement of the case is governed by the actual terms of the mortgage and note, and when followed, certain consumer protection statutes. Most contracts allow a cure period before a lawsuit may be commenced, and the time line from the drafting of a complaint to getting a summary judgment can vary by jurisdiction and lender practice. Filing an answer can slow down the process for several months, especially if there are merits and the case is tried. However, using an answer as a mere delay tactic can incur further costs and fees under some circumstances if the lender is willing to pursue them. But don’t forget: ALWAYS FILE AN ANSWER TO A FORECLOSURE COMPLAINT.
Thus a conservative answer to how long you have until they take the house in foreclosure, is:
Answer: It depends on what redemption period applies, if you file an answer, and how aggressively the lender pursues the property. For most Wisconsin residents who are living in the home, and who will not be sued for money damages, the answer is at least seven months or more from the time you are sued.
If you take nothing else of value from this article, take this: you probably have more time than you think. Don’t fall victim to foreclosure rescue scams. The Wisconsin State Library has a wonderful resource page to help answer basic questions, including an article on how to answer your foreclosure complaint. Gaining the advice of an attorney is critical, and you should always know your options before making a decision on how to handle the foreclosure, especially when you think you don’t have any options left. We charge a flat minimal fee for all consultations concerning foreclosure lawsuits.