Legal Question in Real Estate Law in Wisconsin

Yes, this is a common practice which is probably authorized under the terms of the mortgage which you signed, since all of the bank's duties to you in terms of applying payments are laid out there, which will eventually require them divide up the payments at some time before the end of the year. Otherwise, it is most common to have payments placed into a "suspense account," and not applied at all, when people are behind on their mortgages and facing foreclosure. The bank's legal reasons are simple; if they want to foreclose, they don't want to waive their claim of default by applying the payments to principal. Instead, they are merely accumulating the money in an escrow account, which would usually be at least partially refunded to you at the end of the foreclosure process (after your eviction), if you don't manage to eventually catch up the payments and pay all of the bank's attorney fees and other expenses. If you are behind, you are now at stage in the foreclosure process where you could greatly benefit from a chat with an experienced foreclosure defense or bankruptcy attorney. In chapter 13 bankruptcy, it is possible for the court to force the bank to apply your payments to the loan again, and eventually, to reinstate you loan, assuming that you have sufficient income for it. Even if you don't have sufficient income, a chapter 7 bankruptcy can also keep you in your home and postpone eviction quite a bit longer, even when there is no real hope of saving it, so long as you speak with an attorney sufficiently early in the process.

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