Legal Question in Real Estate Law in Wisconsin

Foreclosures--Necessary Parties, Real Estate Title Law

Generally speaking, in order to effect the title to any real estate parcel via court action, one must sue all of the parties shown on the title with whom one is concerned. If a party with an interest in the title is not sued, the foreclosure may sometimes have no effect upon their rights. This may defeat the bank's purpose of obtaining a clear, marketable title which it can sell to the highest bidder at the sheriff's sale in order to pay off as much of the loan as possible. An excepting would be a second mortgage holder who is foreclosing. They would usually not name a first mortgage holder since they cannot effect their rights in any event, and must take the property subject to the first mortgage obligations. Any amounts left over after the sale will be distributed to lien holders in order of the priority in recording their interests. Banks therefore generally sue all junior lien holders in any foreclosure action. I could not begin to advise you on the status of any title without seeing a title report, although the list of parties who are sued may provide some idea of what the report once showed. The lawyers representing banks will generally pull title reports several times during a foreclosure process and will continue to add additional parties as their interests appear on the title. Banks will also generally sue parties in possession of the property (or potentially in possession), since it will not be able to evict them without a court determination that the bank's rights are superior to theirs as a spouse, tenant, resident, squatter, or whoever else is present. You should really consult with an experienced real estate attorney before you consider bidding at any sheriff's sale.