Under s. 846.165 (2) [now s. 846.16 (2m) (ae)], when a creditor seeks a deficiency judgment, there is no presumption that the property sold for fair value. From that, it follows that when the mortgagee does not seek a deficiency judgment, there is a presumption. The statute does not eliminate the requirement that the court find fair value. A tax assessment, like an appraisal, can be viewed as a measure of fair value. Each case must be considered on its merits. Bank of New York v. Mills, 2004 WI App 60
, 270 Wis. 2d 790
, 678 N.W.2d 332
This section does not clarify when the 10-day period for paying the remaining purchase price begins to run after a case is remitted following an appeal. When the appeals process interrupts a purchaser's ability to pay the remaining balance of the purchase price, the purchaser is entitled, upon remand, to notice from the circuit court as to when the 10-day period begins to run. First Banking Center v. Twelfth Street Investors LLC, 2011 WI App 103
, 336 Wis. 2d 150
, 805 N.W.2d 381
Section 846.165 (2) [now sub. (2m) (ae)] does not apply to a credit toward a judgment on a guaranty. Rather, the provision applies to the relationship between only the mortgagee and mortgagor that signed the promissory note underlying the mortgage. Therefore, that provision cannot be read as requiring a circuit court to determine the amount of a credit to be applied to a judgment on a guaranty when confirming a foreclosure sale. Horizon Bank, National Association v. Marshalls Point Retreat LLC, 2018 WI 19
, 380 Wis. 2d 60
, 908 N.W.2d 797
When an action for foreclosure against a mortgagor and an action for a money judgment on a guaranty are brought in the same proceeding, the circuit court may, in its discretion, decide the separate questions of fair value for purposes of s. 846.165 (2) [now sub. (2m) (ae)] and the amount of any credit toward the judgment on the guaranty either at the same time or separately. Horizon Bank, National Association v. Marshalls Point Retreat LLC, 2018 WI 19
, 380 Wis. 2d 60
, 908 N.W.2d 797
Disposition of surplus.
If there shall be any surplus paid into court by the sheriff or referee, any party to the action or any person not a party who had a lien on the mortgaged premises at the time of sale, may file with the clerk of court into which the surplus was paid, a notice stating that the party or person is entitled to such surplus money or some part thereof, together with the nature and extent of the party's or person's claim. The court shall determine the rights of all persons in such surplus fund by reference or by testimony taken in open court, but no such hearing shall be had in court or before a referee except upon 8 days' notice to all persons that have appeared in the action or filed notice of claim to such surplus money. If any such claimant shall not have appeared by attorney, notice of such hearing may be served by mail directed to the claimant at the place of the claimant's residence as stated in the claimant's notice of claim.
History: 1973 c. 189
; Stats. 1973 s. 816.162; Sup. Ct. Order, 67 Wis. 2d 585, 768 (1975); Stats. 1975 s. 846.162; 1993 a. 486
This section is procedural. It creates no substantive rights. First Wisconsin Trust Co. v. Rosen, 143 Wis. 2d 468
, 422 N.W.2d 128
(Ct. App. 1988).
A mortgage covenant to pay taxes expires when the mortgage lien is extinguished upon confirmation of the sheriff's sale. Taxes accruing after confirmation cannot be recovered from a surplus in sale proceeds. Harvest Savings Banking v. ROI Investments, 209 Wis. 2d 586
, 563 N.W.2d 579
(Ct. App. 1997), 96-0998
This section does not apply to a junior lienholder. Section 846.15 specifically addresses junior lienholders. In practice, the “right to redeem" may be used loosely to include both a mortgagor's right to redeem under s. 846.13 and a junior lienholder's right under s. 846.15 to pay the judgment and become subrogated to the plaintiff's rights in the judgment. However, when a mortgagor pays the plaintiff the amount of the judgment, the judgment is discharged and the mortgagor retains title. When a junior lienholder pays the plaintiff the amount of the judgment, the junior lienholder neither retains title, since it never had it, nor acquires title; rather, the junior lienholder acquires the rights the plaintiff has as a result of the judgment. JP Morgan Chase Bank, NA v. Green, 2008 WI App 78
, 311 Wis. 2d 715
, 753 N.W.2d 536
Application for confirmation of sale and for deficiency judgment.
No sale on a judgment of mortgage foreclosure shall be confirmed unless 5 days' notice has been given to all parties that have appeared in the action. Such notice shall be given either personally or by registered mail directed to the last-known post-office address, mailed at least 5 days prior to the date when the motion for confirmation is to be heard, if any post-office address is known; if not known, mailing may be dispensed with but an affidavit shall be filed with the court stating that the address is not known, and the notice shall state, in addition to other matter required by law, the amount of the judgment, the amount realized upon the sale, the amount for which personal judgment will be sought against the several parties naming them, and the time and place of hearing.
History: 1973 c. 189
; Stats. 1973 s. 816.165; Sup. Ct. Order, 67 Wis. 2d 585, 768 (1975); Stats. 1975 s. 846.165; 2017 a. 208
For tardy confirmation of sale, after 6 years, see s. 846.18
The purchaser at a foreclosure sale has a right to notice of when the sale has been confirmed, when the mortgagor's redemption period ends, and when the 10-day payment period under s. 846.17 [now s. 846.16 (2m) (b)] expires. GMAC Mortgage Corp. v. Gisvold, 215 Wis. 2d 459
, 572 N.W.2d 466
This section does not preclude a purchaser from obtaining a confirmation hearing when the mortgagee's application for confirmation has been withdrawn. This affords the purchaser an opportunity to have the court decide whether it is entitled to transfer of the property under applicable law, and does not undermine the rights of the lienholders and mortgagor to object to certification as provided by law. JP Morgan Chase Bank, NA v. Green, 2008 WI App 78
, 311 Wis. 2d 715
, 753 N.W.2d 536
The notice referred to throughout sub. (1) [now this section] is the notice of the first sentence that must be given to all parties that have appeared in the action. There is no requirement that when no party is entitled to personal notice under sub. (1) [now this section] there must be a general posting or publication of notice. There is no general hearing requirement or general motion-for-confirmation requirement that applies when no notice of hearing is required. Wells Fargo Bank, N.A. v. Biba, 2010 WI App 140
, 329 Wis. 2d 787
, 793 N.W.2d 95
Tardy confirmation of sale.
In all cases where a mortgage foreclosure sale has been made but not confirmed and the purchaser or the purchaser's successor or assign has taken possession of the land by virtue of said sale, and occupied it for 6 years from and after said sale, the purchaser may apply for and the court may enter an order confirming said foreclosure sale with the same force and effect as if said confirmation was made as otherwise provided by law.
History: 1973 c. 189
; Stats. 1973 s. 816.18; Sup. Ct. Order, 67 Wis. 2d 585, 768 (1975); Stats. 1975 s. 846.18; 1993 a. 486
This section does not establish that a purchaser may apply for confirmation only after 6 years of occupancy. It provides a remedy for purchasers or their successors or assigns when, for whatever reason, the sale is not confirmed according to the procedures in s. 846.165, but their occupancy for a sufficient period entitles them to confirmation by this alternative route. JP Morgan Chase Bank, NA v. Green, 2008 WI App 78
, 311 Wis. 2d 715
, 753 N.W.2d 536
Discharge after foreclosure.
After a mortgage has been foreclosed by action and the judgment and costs have been paid and satisfaction of the mortgage entered upon the court record, the clerk of circuit court, on request, shall sign a certificate attesting to those facts, which certificate is entitled to record.
Sup. Ct. Order, 67 Wis. 2d 585, 768 (1975); 1995 a. 224
For redemption from mortgage foreclosure, prior to sale, see s. 846.13
Redemption period for land contracts.
If a court finds that the purchaser under a land contract is obligated to make certain payments under that land contract, that the purchaser has failed to make the required payments and that the vendor is entitled to a judgment of strict foreclosure, the court shall set a redemption period of at least 7 working days from the date of the judgment hearing or, if there is no hearing, from the date of the entry of the judgment order. No judgment of strict foreclosure is final until the court enters an order after the expiration of the redemption period confirming that no redemption has occurred and making the judgment of strict foreclosure absolute.
History: 1995 a. 250
Equitable title remains with a land contract vendee until a circuit court enters an order under this section confirming the land contract vendee's default following the expiration of the redemption period for strict foreclosure. Steiner v. Wisconsin American Mutual Insurance Company, 2005 WI 72
, 281 Wis. 2d 395
, 697 N.W.2d 452
The minimum redemption period was enacted to prevent a court from not affording any right to redemption when the vendee, or someone else so entitled, wanted one. Neither this purpose nor the language of the statute supports requiring a period of redemption even if all parties with a right to redemption waive that right. The use of the word shall does not mean that the vendee or whoever has the right to redemption may not waive it. Republic Bank of Chicago v. Lichosyt, 2007 WI App 150
, 303 Wis. 2d 474
, 736 N.W.2d 153
Regulation of foreclosure reconveyances. 846.40(1)(a)
“Closing" means an in-person meeting to complete final documents incident to the sale of real property or the creation of a mortgage on real property that is conducted by a closing agent who is not employed by, an affiliate of, or employed by an affiliate of, any foreclosure purchaser involved in the closing, and who does not have a business or personal relationship with any foreclosure purchaser involved in the closing other than the provision of real estate settlement services.
“Foreclosed homeowner" means an owner of a residence in foreclosure.
“Foreclosure purchaser" means a person that has acted as the acquirer in a foreclosure reconveyance. “Foreclosure purchaser" also includes a person that has acted in joint venture or joint enterprise with one or more acquirers in a foreclosure reconveyance. “Foreclosure purchaser" does not include any of the following:
A natural person who shows that he or she is not in the business of foreclosure purchasing and who has a prior personal relationship with the foreclosed homeowner.
A federal or state chartered bank, savings bank, savings and loan association, or credit union.
“Foreclosure reconveyance" means a transaction involving all of the following:
The transfer of title to real property by a foreclosed homeowner during a foreclosure proceeding, either by a transfer of interest from the foreclosed homeowner or by the creation of a mortgage or other lien or encumbrance during the foreclosure process.
The subsequent conveyance, or promise of a subsequent conveyance, of an interest back to the foreclosed homeowner by the acquirer or a person acting in participation with the acquirer that allows the foreclosed homeowner to possess either the residence in foreclosure or other real property, which interest includes an interest in a land contract, purchase agreement, option to purchase, or lease.
“Primary housing expenses" means the sum of payments for regular principal, interest, rent, utilities, fire and casualty insurance, real estate taxes, and association dues.
“Resale" means a bona fide market sale of the property subject to the foreclosure reconveyance by the foreclosure purchaser to an unaffiliated 3rd party.
“Resale price" means the gross sale price of the property on resale.
“Residence in foreclosure" means residential real property located in this state that consists of one to 4 family dwelling units and with respect to which real property there is a delinquency or default on any loan payment or debt secured by or attached to the residential real property, including land contract payments. The owner of the residential real property may, but is not required to, occupy the residential real property as the owner's principal place of residence.
Contract requirement; form and language.
A foreclosure purchaser that enters into any foreclosure reconveyance shall do so by a written contract. Every contract must be written in letters of not less than 12-point boldface type, both in English and in the same language principally used by the foreclosure purchaser and foreclosed homeowner to negotiate the sale of the residence in foreclosure if other than English, and must be fully completed, signed, and dated by the foreclosed homeowner and foreclosure purchaser before the execution of any instrument of conveyance of the residence in foreclosure.
Every contract required by sub. (2)
must contain the entire agreement of the parties and must include all of the following terms:
The name, business address, and telephone number of the foreclosure purchaser.
The total consideration to be given by the foreclosure purchaser in connection with or incident to the sale.
A complete description of the terms of payment or other consideration, including any services of any nature that the foreclosure purchaser represents he or she will perform for the foreclosed homeowner before or after the sale.
The time at which possession is to be transferred to the foreclosure purchaser.
A complete description of the terms of any related agreement designed to allow the foreclosed homeowner to remain in possession of the home, such as a rental agreement, repurchase agreement, land contract, or lease with option to purchase.
Immediately above the statement required by sub. (5) (a)
, in not less than 14-point boldface type if the contract is printed or in capital letters if the contract is typed, and completed with the name of the foreclosure purchaser, the following notice:
NOTICE REQUIRED BY WISCONSIN LAW
Until your right to cancel this contract has ended, .... (Name of foreclosure purchaser) or anyone working for .... (Name of foreclosure purchaser) CANNOT ask you to sign or have you sign any deed or any other document.
The contract required by this subsection survives delivery of any instrument of conveyance of the residence in foreclosure and has no effect on persons other than the parties to the contract.
In addition to any other right of rescission, the foreclosed homeowner has the right to cancel any contract with a foreclosure purchaser until midnight of the 5th business day following the day on which the foreclosed homeowner signs a contract that complies with subs. (2)
or until 8:00 a.m. on the last day of the period during which the foreclosed homeowner has a right of redemption, whichever occurs first.
Cancellation occurs when the foreclosed homeowner delivers to the foreclosure purchaser, personally or by certified mail, a signed and dated written notice of cancellation. The contract and notice of cancellation form under sub. (5) (b)
must contain a street or physical address to which notice of cancellation may be mailed by certified mail or personally delivered. A post office box may be designated for delivery by certified mail only if it is accompanied by a street or physical address at which the notice may be personally delivered. If the notice of cancellation is personally delivered, the foreclosure purchaser must provide a receipt to the foreclosed homeowner. If cancellation is mailed by certified mail, delivery is effective when the notice of cancellation is deposited in the U.S. mail. If cancellation is personally delivered, delivery is effective when the notice of cancellation is handed to the foreclosure purchaser.
A notice of cancellation given by the foreclosed homeowner need not take the particular form provided under sub. (5) (b)
Within 10 days following receipt of a notice of cancellation given in accordance with this subsection, the foreclosure purchaser shall return without condition any original contract and any other documents signed by the foreclosed homeowner.
The contract must contain conspicuously and in immediate proximity to the space reserved for the foreclosed homeowner's signature, in not less than 14-point boldface type if the contract is printed or in capital letters if the contract is typed, the following statement: “You may cancel this contract for the sale of your house without any penalty or obligation at any time before .... (date and time of day). See the attached notice of cancellation form for an explanation of this right."
The foreclosure purchaser shall accurately enter the date and time of day on which the cancellation right ends.
The contract must be accompanied by a completed form in duplicate, captioned “Notice of cancellation
" in 12-point boldface type if the contract is printed or in capital letters if the contract is typed, followed by a space in which the foreclosure purchaser shall enter the date on which the foreclosed homeowner executes the contract. This form must be attached to the contract, must be easily detachable, and must contain, in not less than 10-point type if the contract is printed or in capital letters if the contract is typed, the following statement:
NOTICE OF CANCELLATION
(Enter date contract signed)
You may cancel this contract for the sale of your house, without any penalty or obligation, at any time before .... (date and time of day).
To cancel this transaction, you may mail by certified mail or personally deliver a signed and dated copy of this notice of cancellation to .... (name of purchaser) at .... (street or physical address of purchaser's place of business) NOT LATER THAN .... (date and time of day). If you personally deliver this notice of cancellation, .... (name of purchaser) must give you a receipt.
(Seller's signature) ....
The foreclosure purchaser shall provide the foreclosed homeowner with a copy of the contract and the attached notice of cancellation form at the time the contract is executed by all parties.
The 5-day period under sub. (4) (a)
during which the foreclosed homeowner may cancel the contract does not begin to run until all parties to the contract have executed the contract and the foreclosure purchaser has complied with this subsection.
Any waiver of the provisions of this section is void and unenforceable as contrary to public policy, except that a foreclosed homeowner may waive the 5-day right to cancel under sub. (4) (a)
if the property is subject to a foreclosure sale within the 5 business days and the foreclosed homeowner agrees to waive his or her right to cancel in a handwritten statement signed by all parties holding title to the foreclosed property.
Any provision in a contract entered into on or after March 6, 2009, that attempts or purports to require arbitration of any dispute arising under this section is void at the option of the foreclosed homeowner.
General prohibitions and requirements. 846.40(8)(a)
A foreclosure purchaser may not enter into, or attempt to enter into, a foreclosure reconveyance with a foreclosed homeowner unless all of the following are satisfied:
The foreclosure purchaser verifies and can demonstrate that the foreclosed homeowner has a reasonable ability to pay for the subsequent conveyance of an interest back to the foreclosed homeowner. In the case of a lease with an option to purchase, payment ability also includes the reasonable ability to make the lease payments and purchase the property within the term of the option to purchase. There is a rebuttable presumption that a foreclosed homeowner is reasonably able to pay for the subsequent conveyance if the foreclosed homeowner's payments for primary housing expenses and regular principal and interest payments on other personal debt, on a monthly basis, do not exceed 60 percent of the foreclosed homeowner's monthly gross income. There is a rebuttable presumption that the foreclosure purchaser has not verified reasonable payment ability if the foreclosure purchaser has not obtained documents other than a statement by the foreclosed homeowner of assets, liabilities, and income.
The foreclosure purchaser and the foreclosed homeowner complete a closing for any foreclosure reconveyance in which the foreclosure purchaser obtains a deed or mortgage from a foreclosed homeowner.
The foreclosure purchaser obtains the written consent of the foreclosed homeowner to a grant by the foreclosure purchaser of any interest in the property during such times as the foreclosed homeowner maintains any interest in the property.
A foreclosure purchaser shall do either of the following:
Ensure that title to the subject dwelling has been reconveyed to the foreclosed homeowner.
Make a payment to the foreclosed homeowner such that the foreclosed homeowner has received consideration in an amount of at least 82 percent of the fair market value of the property within 150 days after either the eviction of, or voluntary relinquishment of possession of the dwelling by, the foreclosed homeowner. The foreclosure purchaser shall make a detailed accounting of the basis for the payment amount, or a detailed accounting of the reasons for failure to make a payment, including providing written documentation of expenses, within this 150-day period. The accounting shall be on a form prescribed by the attorney general, in consultation with the secretary of agriculture, trade and consumer protection. For purposes of this subdivision, all of the following apply:
There is a rebuttable presumption that an appraisal by a person licensed or certified by an agency of the federal government or this state to appraise real estate constitutes the fair market value of the property.
The time for determining the fair market value amount shall be specified in the foreclosure reconveyance contract as either at the time of the execution of the foreclosure reconveyance contract or at resale. If the contract states that the fair market value shall be determined at the time of resale, the fair market value shall be the resale price if it is sold within 120 days after the eviction of, or voluntary relinquishment of the property by, the foreclosed homeowner. If the contract states that the fair market value shall be determined at the time of resale, and the resale is not completed within 120 days after the eviction of, or voluntary relinquishment of the property by, the foreclosed homeowner, the fair market value shall be determined by an appraisal conducted during this 120-day period and payment, if required, shall be made to the foreclosed homeowner, but the fair market value shall be recalculated as the resale price on resale and an additional payment amount, if appropriate based on the resale price, shall be made to the foreclosed homeowner within 15 days after resale, and a detailed accounting of the basis for the payment amount, or a detailed accounting of the reasons for failure to make additional payment, shall be made within 15 days after resale, including providing written documentation of expenses. The accounting shall be on a form prescribed by the attorney general, in consultation with the secretary of agriculture, trade and consumer protection.
“Consideration" means any payment or thing of value provided to the foreclosed homeowner, including unpaid rent or land contract payments owed by the foreclosed homeowner prior to the date of eviction or voluntary relinquishment of the property, reasonable costs paid to 3rd parties necessary to complete the foreclosure reconveyance transaction, payment of money to satisfy a debt or legal obligation of the foreclosed homeowner, the reasonable cost of repairs for damage to the dwelling caused by the foreclosed homeowner, or a penalty imposed by a court for the filing of a frivolous claim in an eviction action under sub. (9)
. “Consideration" does not include amounts imputed as a down payment or fee to the foreclosure purchaser, or a person acting in participation with the foreclosure purchaser, incident to a land contract, lease, or option to purchase entered into as part of the foreclosure reconveyance, except for reasonable costs paid to 3rd parties necessary to complete the foreclosure reconveyance.
A foreclosure purchaser may not enter into repurchase or lease terms as part of the subsequent conveyance that are unfair or commercially unreasonable, or engage in any other unfair conduct.
A foreclosure purchaser may not represent, directly or indirectly, any of the following: