Wisconsin mortgages usually won’t result in deficiency claims
Posted on Apr 6, 2010 in Alternatives to Bankruptcy, Foreclosure - Saving Your Home, Wisconsin
If you are facing foreclosure in Wisconsin, you’re not likely to suffer a deficiency judgment even if your house has lost a lot of value. What’s a deficiency judgment? That’s a judgment against you for the difference between the amount owed on your mortgage and the value of your house. So many home-owners find themselves “upside-down” – the value of their homes are less than their mortgage. They don’t see any reason paying for something worth less than it is worth. They don’t think of their home as a wasting asset. So they stop paying on their mortgage. It may be cheaper for them to rent.
Foreclosure is not a good thing. You will lose your home. You’ll have to move. But you probably won’t have to pay a big judgment to the mortgage company. That’s because in Wisconsin, the lender on residential real estate has a choice of waiting 12 months from the time the foreclosure case starts before the foreclosure is complete or 6 months. If the lender selects the 6 month waiting period, which is almost always the case, the lender must give up any rights to a judgment for the difference between the loan and the value of the home – the deficiency judgment.
So if you face foreclosure in Wisconsin and that’s your only big debt, you at least may be able to avoid the need to file for bankruptcy.
Call us at Lakelaw to discuss your options – we’re at 262 694 7300 and we help people with mortgage foreclosure and bankruptcy throughout the State of Wisconsin.