LRB-4088/2
KRP:jld&wlj
2017 - 2018 LEGISLATURE
November 29, 2017 - Introduced by Representatives Katsma, Goyke, Allen,
Anderson, Ballweg, Berceau, Bowen, E. Brooks, R. Brooks, Brostoff,
Considine, Crowley, Felzkowski, Fields, Hebl, Hutton, Jacque, Knodl,
Kooyenga, Kuglitsch, Kulp, Mursau, Ohnstad, Petersen, Pope, Riemer,
Ripp, Rohrkaste, Sargent, Sinicki, Skowronski, Spiros, Spreitzer, Subeck, C.
Taylor
, Tusler, Wachs, Young and Zepnick, cosponsored by Senators Olsen,
Johnson, Carpenter and Cowles. Referred to Committee on Local
Government.
AB691,1,3 1An Act to amend 846.16 (1); and to create 846.155 of the statutes; relating to:
2eligible bidders at foreclosure sales, eligible purchasers of foreclosed property,
3and providing a penalty.
Analysis by the Legislative Reference Bureau
This bill limits who may bid at a sale of foreclosed property, requires a
purchaser of foreclosed property to submit an affidavit to the clerk of court affirming
that the purchaser is an eligible bidder, and provides penalties for a purchaser that
makes a false representation on that affidavit.
Under the bill, no person other than a party to the foreclosure action
(third-party bidder) may bid at a foreclosure sale if any of the following applies:
1. The third-party bidder owns property against which property taxes have
been levied that are more than 120 days delinquent.
2. The third-party bidder is directly or indirectly owned, managed, or
controlled by a person that owns property against which property taxes have been
levied that are more than 120 days delinquent.
3. The third-party bidder directly or indirectly owns, manages, or controls an
entity that owns property against which property taxes have been levied that are
more than 120 days delinquent.
4. An unsatisfied judgment related to a violation of a state or local building code
with respect to property in this state has been rendered against a) the third-party
bidder; b) a person that directly or indirectly owns, manages, or controls the
third-party bidder; or c) an entity that is directly or indirectly owned, managed, or
controlled by the third-party bidder.

5. The third-party bidder is bidding on behalf of or as part of an agreement with
a person to which any of the conditions described above applies.
The bill also prohibits any assignment of a bid submitted at a foreclosure sale
to a person that does not meet those minimum bidder qualifications.
Under the bill, a third-party bidder must file an affidavit with the clerk of court
affirming that the third-party bidder meets the minimum bidder qualifications, and
the court may not confirm the sale until that affidavit is filed. If the court determines
that the affidavit contains a false representation, the court may choose not to confirm
the sale and may order that the property be resold and the third-party bidder's
deposit forfeited. If the court determines that the false representation was made
knowingly, the court also may order the third-party bidder, the individual who
signed the affidavit on behalf of the third-party bidder, or both to forfeit up to $1,000
and may bar the third-party bidder, the individual who signed the affidavit on behalf
of the third-party bidder, or both from participating in any foreclosure sales in the
county for a period of time not to exceed one year from the date on which the order
is entered.
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB691,1 1Section 1. 846.155 of the statutes is created to read:
AB691,2,4 2846.155 Eligible bidders at foreclosure sales; affidavit required for
3confirmation; penalties for false representation. (1)
Definitions. In this
4section:
AB691,2,55 (a) “Entity” means a person other than an individual.
AB691,2,86 (b) “Taxes” means general property taxes, as defined in s. 74.01 (1), special
7assessments, as defined in s. 74.01 (3), special charges, as defined in s. 74.01 (4), or
8special taxes, as defined in s. 74.01 (5).
AB691,2,119 (c) “Third-party bidder” means a person that is not a party in the foreclosure
10action, or an agent of a party in the foreclosure action, and that submits a bid at a
11sale of mortgaged premises.
AB691,3,3
1(2) Minimum bidder qualifications. No 3rd-party bidder may submit a bid at
2a sale of mortgaged premises unless the 3rd-party bidder meets all of the following
3qualifications:
AB691,3,54 (a) The 3rd-party bidder does not own an interest in property in this state
5against which taxes have been levied that are more than 120 days delinquent.
AB691,3,86 (b) The 3rd-party bidder is not directly or indirectly owned, managed, or
7controlled, in whole or in part, by a person that owns an interest in property in this
8state against which taxes have been levied that are more than 120 days delinquent.
AB691,3,119 (c) The 3rd-party bidder does not directly or indirectly own, manage, or control,
10in whole or in part, an entity that owns an interest in property in this state against
11which taxes have been levied that are more than 120 days delinquent.
AB691,3,1412 (d) No judgment against the 3rd-party bidder related to a violation of a state
13or local building code with respect to property in this state has been rendered that
14is unsatisfied.
AB691,3,1815 (e) No judgment against a person that directly or indirectly owns, manages, or
16controls, in whole or in part, the 3rd-party bidder related to a violation of a state or
17local building code with respect to property in this state has been rendered that is
18unsatisfied.
AB691,3,2219 (f) No judgment against an entity directly or indirectly owned, managed, or
20controlled, in whole or in part, by the 3rd-party bidder related to a violation of a state
21or local building code with respect to property in this state has been rendered that
22is unsatisfied.
AB691,3,2523 (g) In submitting a bid at the sale, the 3rd-party bidder is not acting on behalf
24of or as part of an agreement with a person that does not meet the qualifications
25described in pars. (a) to (f).
AB691,4,3
1(3) Prebidding acknowledgments. Before allowing a 3rd-party bidder to
2submit a bid at a sale of mortgaged premises, the sheriff or referee shall require the
33rd-party bidder to confirm all of the following:
AB691,4,44 (a) The 3rd-party bidder meets all of the qualifications described in sub. (2).
AB691,4,75 (b) If the 3rd-party bidder submits a bid at the sale, the 3rd-party bidder will
6not assign the bid to a person that, if the person had submitted a bid directly at the
7sale, would not have met the qualifications described in sub. (2).
AB691,4,98 (c) If the 3rd-party bidder is the purchaser of the mortgaged premises, the
93rd-party bidder will file the affidavit described in sub. (5).
AB691,4,1310 (d) The 3rd-party bidder is aware that, if a false representation is made in the
11affidavit described in sub. (5), the 3rd-party bidder, and the individual acting on
12behalf of the 3rd-party bidder, may be subject to the penalties described in sub. (6)
13(c) and (d).
AB691,4,17 14(4) Assignment of bid to unqualified bidder prohibited. No person that
15submits a bid at a sale of mortgaged premises, nor any assignee of that person, may
16assign that bid to a person that, if the person had submitted a bid directly at the sale,
17would not have met the qualifications described in sub. (2).
AB691,4,25 18(5) Filing affidavit of minimum bidder qualifications. (a) If the grantee of a
19deed executed under s. 846.17 is not a party in the foreclosure action, the grantee
20shall file with the clerk of court an affidavit affirming that, as of the date on which
21the affidavit is filed, the grantee meets all of the qualifications described in sub. (2).
22The affidavit also shall identify the name and street address of a person in this state
23that is authorized to accept service of process for the grantee. If the grantee is not
24an individual, an individual who is authorized to act on behalf of the grantee shall
25sign the affidavit.
AB691,5,6
1(b) The director of state courts shall provide to the clerk of court in each county
2a form for use in filing affidavits required under this subsection. The form shall
3require a person that files the affidavit to acknowledge that the person is aware that,
4if a false representation is made in the affidavit, the person, and the individual who
5signs the affidavit on behalf of the person, may be subject to the penalties described
6in sub. (6).
AB691,5,10 7(6) Affidavit required for confirmation of sale; penalties for false
8representations.
(a) If a grantee of a deed executed under s. 846.17 is not a party
9in the foreclosure action, the court may not confirm the sale until the grantee files
10the affidavit required under sub. (5).
AB691,5,1411 (b) At any time before the court confirms a sale of mortgaged premises, a party
12in the foreclosure action or the city, village, town, or county where the mortgaged
13premises are located may provide to the court testimony or evidence that the affidavit
14filed by a grantee under sub. (5) contains a false representation.
AB691,5,1715 (c) If the court determines that the affidavit filed by a grantee under sub. (5)
16contains a false representation, the court may refuse to confirm the sale and may
17order any of the following:
AB691,5,2018 1. That the grantee shall forfeit the amount of the deposit or down payment
19described under s. 846.16 (1) that the sheriff or referee deposits with the clerk of
20court.
AB691,5,2221 2. That the clerk of court shall pay the amount forfeited under subd. 1. to the
22parties that would be entitled to the proceeds of the sale as ordered by the court.
AB691,5,2323 3. That the mortgaged premises shall be resold.
AB691,5,2524 4. That the clerk of court shall destroy the deed executed to the purchaser, and
25that deed is of no effect.
AB691,6,8
1(d) If the court determines that the affidavit filed by a grantee under sub. (5)
2contains a false representation that was made knowingly, in addition to any of the
3penalties imposed under par. (c), the court may order the grantee, the individual who
4signed the affidavit on behalf of the grantee, or both to forfeit up to $1,000 and may
5bar the grantee, the individual who signed the affidavit on behalf of the grantee, or
6both from submitting a bid at any sale of mortgaged premises conducted in the
7county for a period of time not to exceed one year from the date on which the order
8is entered.
AB691,2 9Section 2. 846.16 (1) of the statutes is amended to read:
AB691,7,810 846.16 (1) The sheriff or referee who makes sale of mortgaged premises, under
11a judgment therefor, shall give notice of the time and place of sale in the manner
12provided by law for the sale of real estate upon execution or in such other manner
13as the court shall in the judgment direct; where . The sheriff or referee shall include
14in the notice of sale an explanation regarding the minimum bidder qualifications
15under s. 846.155 (2) that a participant must meet and a statement that, before the
16sale may be confirmed, a purchaser that is not a party in the foreclosure action must
17submit an affidavit to the court affirming that the purchaser meets those minimum
18bidder qualifications. If
the department of veterans affairs is also a party in the
19foreclosure action, the judgment shall direct that notice of sale be given by registered
20mail, return receipt requested, to the department at Madison, Wisconsin, at least 3
21weeks prior to the date of sale, but such requirement does not affect any other
22provision as to giving notice of sale. Except as provided in sub. (3) and s. 846.167,
23the sheriff or referee shall, within 10 days thereafter, file with the clerk of the court
24a report of the sale, and shall also immediately after the sale first deduct any fee due
25under s. 77.22 (1); then deposit that fee, a return under s. 77.22 and the deed with

1the clerk of the court for transmittal to the register of deeds; then deduct the costs
2and expenses of the sale, unless the court orders otherwise, and then deposit with
3the clerk of the court the proceeds of the sale ordered by the court. The sheriff may
4accept from the purchaser at such sale as a deposit or down payment upon the same
5not less than $100, in which case such amount shall be so deposited with the clerk
6of the court as above provided, and the balance of the sale price shall be paid to the
7clerk by the purchaser at such sale upon the confirmation thereof. If the highest bid
8is less than $100, the whole amount thereof shall be so deposited.
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