Historically, there have been a large number of foreclosure cases filed in Wisconsin. The collapse of a housing bubble caused the 2008 mortgage crisis, along with the collapse of numerous financial institutions. This brought with it an unprecedented number of foreclosure filings. Over the last few years since the crisis, as in many other jurisdictions around the nation, the number of foreclosure filings in southeastern Wisconsin counties has gradually decreased.
Despite the lower number of foreclosure filings, many homeowners are still presented with adverse circumstances that have caused them to default on the mortgage note. The most common reasons heard are an unforeseen sickness or health problem that is not covered by insurance or where the homeowner’s insurance benefits have lapsed; a recent job loss suffered by the family’s wage earners; an expiration of an introductory interest rate or other unforeseen circumstances. Some homeowners have made a financial decision just to stop paying their mortgage notes and let their properties be “surrendered” through foreclosure because their real estate has been considerably devalued in the market and their hope of the value increasing to at least match the balance of the mortgage notes has diminished if not lost.
Before homeowners give up, they should exhaust all options available to attempt to renegotiate, modify or restructure their home loans. Local and national banks have many options available to modify existing loans once the homeowners have defaulted. We are big proponents of taking a proactive approach to seeking options to remedy any default, get back on track with payments and seek information regarding the foreclosure process, your rights, and obligations. If an action has been filed and you have been served with a mortgage foreclosure lawsuit, the most important and first thing to do is to read all documents you have received immediately from cover to cover to ensure that you are aware of the allegations made and the timetables to answer or take other actions. These types of lawsuits, like many others, have strict timelines to answer and options will diminish once that time has expired. Be proactive, take the initiative and take charge of the bad situation, read the documents you have received and, if you need help, contact a professional to answer your questions and explain to you the intricacies of the foreclosure process in Wisconsin. As in many other instances, information is power, and you should take all the necessary steps to at the very least acquire enough knowledge and information regarding the process to make the best decisions possible under the circumstances you are currently facing. If all fails and there are no options, at least you will be able to understand the process, how it affects you and how long you can stay in your home.
As with many other counties in Wisconsin, Kenosha and Racine have Mortgage Mediation programs that help homeowners facing foreclosure mediate with the bank and an independent party and determine if the homeowner qualifies for both federal and in-house mortgage modifications. The process will take several months, but in our experience the success rate is high and many of the applicants we have worked with have received modified loans.