Legal Question in Real Estate Law in Wisconsin

Re: mortgage

A bank CAN seek a deficiency and if it does it can get a judgment that can be collected from other non-exempt property that you own, so your concern is genuine.

As a practical matter that does not often happen, at least not for homestead foreclosures. Property owners are entitle to a one year equity of redemption, meaning that they have the right to occupy their home for a year AFTER a foreclosure judgment is entered. However mortgages on homesteads permit the lenders to reduce the time period for the equity of redemption from one year to only 6 months - BUT in order for that to happen the lender has to WAIVE any deficiency. And since lenders are almost universally better off to get the property back sooner, they virtually always select this option.

If the lender DOES select this option it will say that in the formal legal Complaint that is filed with the Summons when the foreclosure action if filed.

Re: mortgage

The question is this: if the bank forecloses, and if the property doesn't sell for enough to cover the bank's mortgage and collection costs, will the bank seek a deficiency judgment against you and seek to collect it? It is very difficult to answer this. In Wisconsin, the bank has two routes to go on residential foreclosures. They can foreclose in 6 months, but must forego any deficiency judgment. Or they can foreclose in a year and get the deficiency judgment. So market conditions dictate, since the bank owes it to its investors to do the most prudent thing to make the bank whole. Once the foreclosure is started, you may be able to tell which direction the bank is going to go by looking at the pleadings. Good luck!

Re: mortgage

The difference between an amount owed under a mortgage note and the price obtained at sheriff's sale is called "the deficiency." Lenders often do, but are not required to, waive the deficiency in order to shorten the redemption period. If they do not, and if the lender gets a judgment for the deficiency amount after foreclosure, it will likely seek to collect from other assets of the debtor(s).

This is not intended to and does not provide legal advice. Rather, we only offer general feedback which may not be applicable depending upon the totality of the facts. Please contact us directly if you have specific questions or concerns. http://www.Grahamlaw.biz