138.052(7e)(b)2.
2. Whether the terms of the agreement to make the loan, including but not limited to the interest rate and any fees charged in connection with the loan, are fixed through the date of the loan closing.
138.052(7e)(b)3.
3. If the lender may change the terms of the agreement to make the loan if the loan is not closed on or before the date agreed upon, the specific terms which the lender may change.
138.052(7m)(a)(a) A lender shall notify the borrower as provided in
par. (b) if on or after May 3, 1988, the payment, collection or other loan or escrow services related to the loan are sold or released.
138.052(7m)(b)
(b) The notice required under
par. (a) shall be in writing and shall include the name, address and telephone number of the party to whom servicing of the loan is sold or released. The lender shall deliver the notice to the borrower by mail or personal service within 15 working days after servicing of the loan is sold or released.
138.052(7s)
(7s) A person who receives loan or escrow payments on behalf of itself or another person shall do all of the following:
138.052(7s)(a)
(a) Respond to a borrower's inquiry within 15 days after receiving the inquiry.
138.052(7s)(b)
(b) Consider that a loan payment by check, or other negotiable or transferable instrument, is made on the date on which the check or instrument is physically received, except that the person may charge back an uncollected loan payment.
138.052(8)
(8) This section does not apply to a loan insured, or committed to be insured, or secured by mortgage or trust deed insured by the U.S. secretary of housing and urban development, insured, guaranteed or committed to be insured or guaranteed under
38 USC 1801 to
1827 or insured or committed to be insured under
7 USC 1921 to
1995.
138.052(9)
(9) Chapters 421 to
428 do not apply to the refinancing, modification, extension, renewal or assumption of a loan which had an original principal balance in excess of $25,000 if the unpaid principal balance of the loan has been reduced to $25,000 or less.
138.052(10)
(10) This section does not apply to any of the following:
138.052(10)(a)
(a) A loan to a corporation or a limited liability company.
138.052(10)(b)
(b) A loan that is primarily for a business purpose or for an agricultural purpose, as defined in
s. 421.301 (4).
138.052(12)(a)(a) Any lender violating
sub. (2) (b),
(5),
(5m) (b) 1.,
(6),
(7),
(7e),
(7m) or
(7s), or an escrow agent, as defined in
sub. (5m) (a), violating
sub. (5m) (b) 2., is liable to the borrower for $500 plus actual damages, costs and reasonable attorney fees.
138.052(12)(b)
(b) Paragraph (a) does not apply to an unintentional mistake corrected by the lender on demand.
138.052 Annotation
Discussion of federal law preemption of section as applied to federally chartered savings institutions regulated by federal home loan bank board. Wisconsin League of Financial Inst. v. Galecki, 707 F Supp. 401 (W.D. Wis. 1989).
138.053
138.053
Regulation of interest adjustment provisions. 138.053(1)(1)
Required contract provisions. No contract between a borrower and a lender secured by a first lien real estate mortgage on, or an equivalent security interest in, an owner-occupied residential property containing not more than 4 dwelling units may authorize the lender to increase the borrower's contractual rate of interest unless the contract provides that:
138.053(1)(a)
(a) No increase may occur until 3 years after the date of the contract;
138.053(1)(b)
(b) No increase may occur unless the borrower is given at least 4 months' written notice of the lender's intent to increase the rate of interest, during which notice period the borrower may repay his or her obligation without penalty;
138.053(1)(c)
(c) The amount of the initial interest rate increase may not exceed $1 per $100 for one year computed upon the declining principal balance;
138.053(1)(d)
(d) The amount of any subsequent interest rate increase may not exceed $1 per $200 for one year computed upon the declining principal balance;
138.053(1)(e)
(e) The interest rate may not be increased more than one time in any 12-month period; and
138.053(1)(f)
(f) The loan may be prepaid without penalty at any time at which the interest rate in effect exceeds the originally stated interest rate by more than $2 per $100 for one year computed upon the declining principal balance.
138.053(2)
(2) Disclosures required. No lender may make a loan secured by a first lien real estate mortgage on, or an equivalent security interest in, an owner-occupied residential property containing not more than 4 dwelling units providing for prospective changes in the rate of interest unless it has clearly and conspicuously disclosed to the borrower in writing:
138.053(2)(a)
(a) That the interest rate is prospectively subject to change;
138.053(2)(b)
(b) That notice of any interest adjustment must be given 4 months prior to any increase; and
138.053(2)(c)
(c) Any prepayment rights of the borrower upon receiving notice of such change.
138.053(3)
(3) Notice of interest adjustment. Notices provided under
sub. (2) shall be mailed to the borrower at his or her last-known post-office address and shall clearly and concisely disclose:
138.053(3)(a)
(a) The effective date of the interest rate increase;
138.053(3)(b)
(b) The increased interest rate and the extent to which the increased rate will exceed the interest rate in effect immediately before the increase;
138.053(3)(c)
(c) The amount of the borrower's contractual monthly principal and interest payment before and after the effective date of the increase;
138.053(3)(d)
(d) Any right of the borrower to voluntarily increase his or her contractual principal and interest payment;
138.053(3)(e)
(e) Whether as a result of the increase a lump sum payment may be necessary at the end of the loan term;
138.053(3)(f)
(f) Whether an additional number of monthly payments may be required; and
138.053(3)(g)
(g) The borrower's right to prepay within 4 months without a prepayment charge.
138.053(4)(a)(a) This section does not apply to variable rate contracts, nor to loans or forbearances to corporations or limited liability companies.
138.053(4)(b)
(b) This section applies only to transactions initially entered into on or after June 12, 1976 and before November 1, 1981.
138.053 Annotation
"Due on sale" provision of note and mortgage was enforceable. Mutual Fed. S. & L. Asso. v. Wisconsin Wire Wks.
71 Wis. 2d 531,
239 N.W.2d 20.
138.055
138.055
Variable rate contracts. 138.055(1)
(1)
Required contract provisions. No contract between a borrower and a lender secured by a first lien real estate mortgage on, or an equivalent security interest in, an owner-occupied residential property containing not more than 4 dwelling units may contain a variable interest rate clause unless the contract provides that:
138.055(1)(a)
(a) When an increase in the interest rate is permitted by a movement upward of a prescribed index, a decrease in the interest rate is also required by a downward movement of the prescribed index subject to
pars. (b) to
(f);
138.055(1)(b)
(b) The rate of interest shall not change more than once during any 6-month period;
138.055(1)(c)
(c) Any singular change in the interest rate shall not exceed the rate of $1 per $200 for one year computed upon the declining principal balance and the total variance in such rate shall at no time exceed a rate equal to $2.50 per $100 for one year computed on the declining principal balance greater or lesser than the rate originally in effect;
138.055(1)(d)
(d) Decreases required by the downward movement of the prescribed index shall be mandatory. Increases permitted by the upward movement of the prescribed index shall be optional with the lender. Changes in the interest rate shall only be made when the prescribed index changes a minimum of one-tenth of one percent;
138.055(1)(e)
(e) The fact that a lender may not have invoked an increase, in whole or in part, shall not be deemed a waiver of the lender's right to invoke an increase at any time thereafter within the limits imposed by this section;
138.055(1)(f)
(f) The rate shall not change during the first semiannual period of the loan; and
138.055(1)(g)
(g) The borrower may prepay the loan in whole or in part within 90 days of notification of any increase in the rate of interest without a prepayment charge.
138.055(2)
(2) Disclosures required. No lender may make a loan secured by a first lien real estate mortgage on, or an equivalent security interest in, an owner-occupied residential property containing not more than 4 dwelling units containing a variable interest rate provision unless it has clearly and conspicuously disclosed to the borrower in writing prior to execution of the loan documents:
138.055(2)(a)
(a) That the loan contract contains a variable interest rate;
138.055(2)(b)
(b) The index used in applying any variable interest rate changes contemplated in the note and its current base; and
138.055(2)(c)
(c) Any prepayment rights of the borrower upon receiving notice of any such change.
138.055(3)
(3) Notice of interest adjustment. When a change in the interest rate is required or permitted by a movement in the prescribed index, the lender shall give notice to the borrower by mail, addressed to the borrower's last-known post-office address, not less than 30 days prior to any change in interest rate, which notice shall clearly and concisely disclose:
138.055(3)(a)
(a) The effective date of the interest rate change;
138.055(3)(b)
(b) The interest rate change, and if an increase, the extent to which the increased rate will exceed the rate in effect immediately before the increase;
138.055(3)(c)
(c) The changes in the index which caused the interest rate change;
138.055(3)(d)
(d) The amount of the borrower's contractual monthly principal and interest payments before and after the effective date of the change in the interest rate;
138.055(3)(e)
(e) Whether as a result of an increase in the interest rate a lump sum payment may be necessary at the end of the loan term; and
138.055(3)(f)
(f) The borrower's right to prepay the loan within 90 days after said notice without a prepayment charge if the notice required an increase in interest rate.
138.055(4)
(4) Index. In determining any variable interest rate changes permitted under this section, a lender shall use either the index published by the federal home loan bank of Chicago based on the cost of all funds to Wisconsin member institutions or an index approved by:
138.055(4)(a)
(a) The division of savings institutions, if the lender is a savings and loan association or savings bank;
138.055(4)(b)
(b) The office of credit unions, if the lender is a credit union;
138.055(4)(c)
(c) The commissioner of insurance, if the lender is an insurance company; or
138.055(5)(a)(a) This section does not apply to loans or forbearances to corporations or limited liability companies.
138.055(5)(b)
(b) This section applies only to transactions initially entered into on or after June 12, 1976 and before November 1, 1981.
138.055 Annotation
Variable rate mortgages: The transition phase. 61 MLR 140.
138.056
138.056
Variable rate loans. 138.056(1)(a)1.
1. The national average mortgage contract rate for major lenders on the purchase of previously occupied homes, as computed by the federal home loan bank board.
138.056(1)(a)2.
2. The monthly average of weekly auction rates on U.S. treasury bills with a maturity of 3 months or 6 months made available by the federal reserve board.
138.056(1)(a)3.
3. The monthly average yield on U.S. treasury securities adjusted to a constant maturity of 1, 2, 3 or 5 years, made available by the federal reserve board.
138.056(1)(a)4.
4. An index readily verifiable by borrowers and beyond the control of an individual lender and approved by:
138.056(1)(a)4.a.
a. The division of savings institutions, if the lender is a savings and loan association or savings bank;
138.056(1)(a)4.c.
c. The commissioner of insurance, if the lender is an insurance company; or
138.056(1)(b)
(b) "Dwelling" includes a cooperative housing unit and a mobile home.
138.056(1)(bm)
(bm) "Mobile home" means a vehicle designed to be towed as a single unit or in sections upon a highway by a motor vehicle and equipped and used, or intended to be used, primarily for human habitation, with walls of rigid uncollapsible construction. "Mobile home" includes the mobile home structure, including the plumbing, heating and electrical systems and all appliances and all other equipment carrying a manufacturer's warranty.
138.056(1)(c)
(c) "Mobile home transaction" means a consumer credit sale, as defined in
s. 421.301 (9), of or a consumer loan, as defined in
s. 421.301 (12), secured by a first lien or equivalent security interest in a mobile home.
138.056(1)(d)
(d) "Variable rate loan" means a mobile home transaction or a loan as defined in
s. 138.052 (1) (b), the terms of which permits the interest rate to be increased or decreased.
