846.40 Regulation of foreclosure reconveyances.

1,333 words·~6 min read·/wi/chapter-846/846-40

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(1)Definitions. In this section:

(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.

(b)“Foreclosed homeowner” means an owner of a residence in foreclosure.

(c)“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:

1. 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.

2. A federal or state chartered bank, savings bank, savings and loan association, or credit union.

(d)“Foreclosure reconveyance” means a transaction involving all of the following:

1. 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.

2. 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.

(e)“Primary housing expenses” means the sum of payments for regular principal, interest, rent, utilities, fire and casualty insurance, real estate taxes, and association dues.

(f)“Resale” means a bona fide market sale of the property subject to the foreclosure reconveyance by the foreclosure purchaser to an unaffiliated 3rd party.

(g)“Resale price” means the gross sale price of the property on resale.

(h)“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.

(2)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.

(3)Contract terms.

(a)Every contract required by sub.

(2)must contain the entire agreement of the parties and must include all of the following terms:

1. The name, business address, and telephone number of the foreclosure purchaser.

2. The address of the residence in foreclosure.

3. The total consideration to be given by the foreclosure purchaser in connection with or incident to the sale.

4. 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.

5. The time at which possession is to be transferred to the foreclosure purchaser.

6. 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.

7. The time for determining the fair market value of the property, as provided under sub.

(b)2. b.

8. A notice of cancellation as provided in sub.

(b).

9. Immediately above the statement required by sub.

(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.

(b)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.

(4)Contract cancellation.

(a)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)to

(6)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.

(b)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.

(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.

(c)A notice of cancellation given by the foreclosed homeowner need not take the particular form provided under sub.

(b).

(d)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.

(5)Notice of cancellation.

1. 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.”

2. The foreclosure purchaser shall accurately enter the date and time of day on which the cancellation right ends.

(b)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: