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AB137, s. 1 1Section 1. 846.015 of the statutes is created to read:
AB137,3,3 2846.015 Mortgage foreclosure procedures for residential property. (1)
3 In this section:
AB137,4,3
1(a) "Borrower" means the owner of residential property who gives a mortgage
2on the residential property to the mortgagee to provide security for repayment of a
3residential mortgage loan made to the owner of the residential property.
AB137,4,54 (b) "Condominium assessments" means regular and special assessments for
5common expenses and charges owed by a condominium owner.
AB137,4,86 (c) "Housing-related debt" means mortgage loan principal and interest
7payments, property taxes, property insurance premiums, and condominium
8assessments.
AB137,4,109 (d) "Mortgagee" means a person who receives a mortgage to secure payment of
10a residential mortgage loan.
AB137,4,1311 (e) "Mortgagee negotiator" means a mortgagee or mortgage servicer who has
12the authority to enter into negotiations regarding modifications to a residential
13mortgage loan.
AB137,4,1414 (f) "Mortgage servicer" means the servicing agent of a mortgagee.
AB137,4,1515 (g) "Rate ceiling" means the lesser of the following:
AB137,4,1716 1. The fully indexed and fully amortizing interest rate applicable to the
17borrower's residential mortgage loan before any modification to the loan is made.
AB137,4,2118 2. The Federal Home Loan Mortgage Corporation's primary mortgage market
19survey rate for 30-year fixed-rate conforming mortgage loans, rounded to the
20nearest 0.125 percent, determined as of the date of preparation of a loan modification
21document.
AB137,4,2322 (h) "Residential mortgage loan" means a loan that is secured by a first lien real
23estate mortgage, or equivalent security interest, in a residential property.
AB137,5,224 (i) "Residential property" means real property on which a one-family to
254-family dwelling is constructed or intended to be constructed, including individual

1condominium units, that the borrower uses, or intends to use, as his or her principal
2place of residence.
AB137,5,4 3(2) A mortgagee or mortgage servicer may foreclose on a residential property
4only if all of the following apply:
AB137,5,55 (a) The residential mortgage loan has been properly recorded.
AB137,5,86 (b) The borrower has defaulted on a condition of the residential mortgage loan
7that gives the mortgagee or mortgage servicer the right to foreclose on the residential
8mortgage loan.
AB137,5,129 (c) If the mortgagee or mortgage servicer is not the original mortgagee or
10mortgage servicer, a record chain of title exists evidencing the assignment or transfer
11of the mortgage to the mortgagee or mortgage servicer foreclosing on the residential
12mortgage loan.
AB137,5,1413 (d) Except as provided in sub. (3), the mortgagee or mortgage servicer complies
14with subs. (4) to (9).
AB137,5,20 15(3) If the mortgagee or mortgage servicer and borrower have agreed to modify
16the residential mortgage loan within the previous 3 years and the mortgagee or
17mortgage servicer has complied with the terms of the agreement, but the borrower
18has not complied with the terms of the agreement, the mortgagee or mortgage
19servicer may commence an action to foreclose on the residential mortgage loan
20without complying with subs. (4) to (9).
AB137,5,24 21(4) Before commencing an action to foreclose on a residential mortgage loan,
22a mortgagee or mortgage servicer shall provide to the borrower at his or her
23last-known address by certified mail a written notice that contains all of the
24following information:
AB137,6,3
1(a) That the residential mortgage loan is in default and a mortgage foreclosure
2action may be commenced, the reason that the residential mortgage loan is in
3default, and the action required of the borrower to cure the default.
AB137,6,44 (b) The name, address, and telephone number of the mortgagee negotiator.
AB137,6,85 (c) The names and addresses of adjustment service companies licensed under
6s. 218.02, and of independent nonprofit organizations approved by the federal
7department of housing and urban development, that offer credit counseling services
8to homeowners.
AB137,6,119 (d) That the borrower may request modifications to the residential mortgage
10loan by sending the request to the mortgagee negotiator by 1st class mail within 10
11working days after receiving the written notice.
AB137,6,1412 (e) A description of the calculations that will be used to determine if the
13borrower is eligible for a modification and of the criteria used to determine that
14eligibility.
AB137,6,1815 (f) A list of the documents that the borrower needs to provide to the mortgagee
16negotiator that are reasonably necessary for the mortgagee negotiator to determine
17the monthly gross income of the borrower in order to make the calculations described
18in par. (e).
AB137,6,2119 (g) That within 20 working days after receiving the written notice the borrower
20is required to provide the documents described in par. (f) and, if the borrower is
21unable to provide some or all of the documents, a statement as to why.
AB137,7,222 (h) That, if the borrower requests modifications to the residential mortgage
23loan within 10 working days after receiving the written notice and provides the
24materials described in par. (g) within 20 working days after receiving the written
25notice, the borrower may meet with the mortgagee negotiator to discuss

1modifications in the residential mortgage loan accompanied by an attorney or an
2employee or member of a company or organization specified in par. (c), or both.
AB137,7,63 (i) That, if the borrower does not request the modifications within 10 working
4days after receiving the written notice or submit the materials described in par. (g)
5within 20 working days after receiving the written notice, the mortgage foreclosure
6action may proceed.
AB137,7,97 (j) That, if the parties reach an agreement to modify the residential mortgage
8loan, the mortgage may not be foreclosed if the borrower complies with the terms of
9the modification agreement.
AB137,7,1210 (k) That the process outlined in the written notice does not prohibit the
11borrower and mortgagee negotiator from agreeing to some other method of resolving
12the residential mortgage loan default.
AB137,7,19 13(5) (a) A borrower may request modifications to the residential mortgage loan
14by sending the request to the mortgagee negotiator by 1st class mail within 10
15working days after receipt of the notice under sub. (4). The borrower may contact an
16adjustment service company licensed under s. 218.02, or an independent nonprofit
17organization approved by the federal department of housing and urban
18development, that offers credit counseling services to homeowners to assist him or
19her in making this request and in negotiating with the mortgagee negotiator.
AB137,7,2220 (b) Within 10 working days after receipt of the borrower's request for
21modifications to the residential mortgage loan, the mortgagee negotiator shall notify
22the borrower that the request for modifications has been received.
AB137,8,223 (c) A borrower shall, within 20 working days after receipt of the notice under
24sub. (4), provide the mortgagee negotiator with the documents listed in the notice as

1provided under sub. (4) (f) and, if the borrower is unable to provide some or all of the
2documents, a statement as to why.
AB137,8,53 (d) Within 10 working days after receipt of the materials required to be
4provided under par. (c), the mortgagee negotiator shall notify the borrower that the
5materials have been received.
AB137,8,76 (e) The mortgagee or mortgage servicer may proceed with the foreclosure action
7if either of the following occurs:
AB137,8,98 1. The borrower does not submit a request for modifications within 10 working
9days after receipt of the notice under sub. (4).
AB137,8,1110 2. The borrower does not provide the materials required under par. (c) within
1120 working days after receipt of the notice under sub. (4).
AB137,8,22 12(6) If the borrower makes a timely request for modifications under sub. (5) (a),
13and timely provides the mortgagee negotiator with the materials required under sub.
14(5) (c), the borrower and mortgagee negotiator shall meet either in person or by
15telephone or other communication method agreed upon by both parties to negotiate
16modifications to the residential mortgage loan. Both parties shall negotiate in good
17faith. The borrower may have a member of an adjustment service company licensed
18under s. 218.02, or of an independent nonprofit organization approved by the federal
19department of housing and urban development, that offers credit counseling services
20to homeowners assist the borrower at the meeting. Either party may be assisted by
21an attorney. Any meeting held in person shall be held at a time and place that is
22convenient to both parties in the county where the residential property is located.
AB137,9,4 23(7) (a) Based on the available information, the mortgagee negotiator shall
24determine if the borrower is eligible for modification of the residential mortgage loan.
25The borrower is eligible for a modification if his or her current housing-related debt

1is 38 percent or more of the borrower's gross income. If the borrower is eligible, the
2mortgagee negotiator shall offer one or more of the following modifications to the
3residential mortgage loan to lower the borrower's housing-related debt to less than
438 percent of the borrower's gross income:
AB137,9,105 1. An interest rate reduction, subject to a floor of 3 percent, for a fixed period
6of at least 5 years. A loan modification under this paragraph may allow the
7mortgagee or mortgage servicer to increase the interest rate after the fixed period of
8the interest rate reduction expires, but the mortgagee or mortgage servicer may not
9increase the interest rate by more than 1 percent per year and may not increase the
10interest rate to more than the rate ceiling.
AB137,9,1211 2. An extension of the amortization period for the residential mortgage loan
12term to 40 years or less from the date of the loan modification.
AB137,9,1513 3. The deferral of payment of up to 20 percent of the unpaid balance of the
14residential mortgage loan, until maturity of the loan, refinancing of the loan, or sale
15of the residential property.
AB137,9,1616 4. The reduction or elimination of late fees or penalties.
AB137,9,1817 (b) In determining how to modify the residential mortgage loan under this
18subsection, all of the following apply:
AB137,9,2119 1. If the loan is pooled for sale to an investor that is a governmental body, the
20mortgagee negotiator shall follow the guidelines established by that governmental
21body for any modifications.
AB137,9,2422 2. If the loan has been sold to a government-sponsored entity, the mortgagee
23negotiator shall follow the guidelines established by that government-sponsored
24entity for any modifications.
AB137,10,6
1(c) If, after reviewing all of the information available to the mortgagee
2negotiator and considering all of the possible methods of modifying the residential
3mortgage loan under par. (a), the mortgagee negotiator determines that it is not
4possible to lower the borrower's housing-related debt to less than 38 percent of the
5borrower's gross income, the mortgagee negotiator shall inform the borrower of that
6determination under sub. (8) (a) 2.
AB137,10,107 (d) This subsection does not prohibit a modification to the residential mortgage
8loan on other terms, or a loss mitigation strategy other than a loan modification, if
9the other modification or strategy is agreed to by the borrower and mortgagee
10negotiator.
AB137,10,13 11(8) (a) The mortgagee negotiator shall send by 1st class mail all of the following
12to the borrower no later than 30 calendar days after receipt of the materials required
13under sub. (5) (c):
AB137,10,1614 1. If the borrower is not eligible for modifications to the residential mortgage
15loan, a statement explaining the criteria used to determine eligibility and why the
16borrower has not met these criteria.
AB137,10,2017 2. If the borrower is eligible for modifications to the residential mortgage loan,
18but none of the available modifications lower the borrower's housing-related debt to
19less than 38 percent of the borrower's gross income, a statement informing the
20borrower of how that determination was made.
AB137,10,2521 3. If the borrower is eligible for modifications to the residential mortgage loan,
222 written copies of the mortgage modification agreement proposed by the mortgagee
23negotiator with a statement telling the borrower to sign a copy of the proposal and
24return it to the mortgagee negotiator within 10 working days after receipt of the
25proposal.
AB137,11,4
14. A copy of all calculations used by the mortgagee negotiator to determine if
2the borrower was eligible for modifications to the residential mortgage loan and to
3determine if the available modifications lowered or failed to lower the borrower's
4housing-related debt to less than 38 percent of the borrower's gross income.
AB137,11,75 5. If requested by the borrower, a copy of the program, process, or guidelines
6the mortgagee negotiator used to determine which modification or modifications to
7the residential mortgage loan would be offered to the borrower.
AB137,11,108 (b) The borrower shall mail by 1st class mail his or her signed acceptance of the
9proposed mortgage modification agreement to the mortgagee negotiator within 10
10working days of receipt of the proposal provided under par. (a) 3.
AB137,11,17 11(9) (a) If the mortgagee negotiator determines that the borrower is not eligible
12for a modification to the residential mortgage loan or that none of the available
13modifications lower the borrower's housing-related debt to less than 38 percent of
14the borrower's gross income, the mortgagee or mortgage servicer may, not less than
1520 working days after the statement is mailed to the borrower under sub. (8) (a) 1.,
16commence an action to foreclose on the mortgage if all of the conditions under sub.
17(2) are met.
AB137,11,2118 (b) If the mortgagee negotiator determines that the borrower is eligible for a
19modification to the residential mortgage loan, the mortgagee or mortgage servicer
20may commence an action to foreclose on a mortgage if all the following conditions are
21met:
AB137,11,2322 1. The mortgagee negotiator has in good faith offered the borrower a mortgage
23modification agreement prepared in compliance with sub. (7).
AB137,12,3
12. For reasons not related to any action or inaction of the mortgagee or
2mortgage servicer, the borrower does not submit an acceptance of the mortgage
3modification agreement within the 10 working days specified under sub. (8) (b).
AB137,12,6 4(10) If the court in which an action is commenced to foreclose on a residential
5mortgage loan determines that the mortgagee or mortgage servicer did not comply
6with this section, the court shall dismiss the action.
AB137,12,9 7(11) (a) Except as provided in par. (b), this section applies to foreclosure actions
8that are commenced on or after the effective date of this paragraph .... [LRB inserts
9date], and before December 31, 2014.
AB137,12,1110 (b) This section applies to a foreclosure action that is commenced after
11December 31, 2014, if notice under sub. (4) was mailed before that date.
AB137,12,1212 (End)
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