Recent Amendments to Wisconsin’s Foreclosure Statutes May Delay the Recording of Deeds After Sheriff’s Sale
Recent amendments to Wisconsin’s foreclosure statutes went into effect on December 1, 2017. The amendments significantly changed the process of recording deeds after confirmation of sheriff’s sales throughout Wisconsin.
The amendments repealed Wis. Stats. §§ 846.167 and 846.17. These statutes were colloquially known as the “Milwaukee County Rule”, because Wis. Stat. § 846.167 only applied in counties having a population of 750,000 or more and Milwaukee County was the only county that met this criterion. This statute provided that once the court confirms the sheriff’s sale and upon compliance by the purchaser with the terms of sale and payment of the balance of the sale price, the clerk of court shall transmit the sheriff’s deed to the register of deeds for the county.
This statute evolved out of the need for ensuring that sheriff’s sale deeds issued in Milwaukee County foreclosure cases were submitted to the register of deeds for recording. Frequently third party winning bidders at Milwaukee County sheriff’s sales failed to record the sheriff’s deed. This caused many headaches for the taxing and code enforcement authorities because the foreclosed mortgagor remained the owner of record.
For all other counties, Wis. Stat. § 846.17 provided that once the court confirms the sheriff’s sale and upon compliance by the purchaser with the terms of sale and payment of the balance of the sale price, the clerk of court shall transmit the deed directly to the purchaser (which was also the procedure in Milwaukee County before the enactment of Wis. § 846.167 in 2015). When the sheriff’s deed was delivered to our firm as counsel for the lender/mortgagee purchaser, our office was able to immediately e-record the sheriff’s deed. However, with the new amendments, there may be delays in recording the sheriff’s deed that are outside the control of counsel.
The amendments now require that all counties follow the Milwaukee County Rule, that is, upon confirmation of the sale and compliance by the purchaser with the terms of the sale and payment of any balance of the sale price, and unless otherwise ordered by the court, the clerk of court shall transmit the deed to the register of deeds. See Wis. Stat. § 846.16(3m)(a) (2017). Experience with the Milwaukee County Rule has shown that lender/mortgagee sheriff’s sale purchasers have encountered delays in having the sheriff’s deed recorded in part because the statute does not impose a deadline for the clerk of court to transmit the deed to the register of deeds and does not impose a deadline for the register of deeds to record the sheriff’s deed.
Perhaps courts will become receptive to utilizing the “unless otherwise ordered by the court” clause in the statute to direct the clerk of court to deliver the sheriff’s deed directly to legal counsel for the lender/mortgagee sheriff’s sale purchaser — thereby allowing legal counsel to expedite the recording of the sheriff’s deed. Developing an expedited protocol for lender/mortgagees may have to come about by request in the motion to confirm the sale on a case by case basis or by local court rule of the individual circuit courts because the current statutory scheme does not explicitly provide for a carve-out or exception for lender/mortgagee purchasers.
Additionally, the amendments revised the notice of sheriff’s sale requirements. In addition to the time and place of the sale (as required in the prior version of the statute), the notice of sheriff’s sale must also contain the street address of the real estate to be sold and the sum of the judgment.
If you have any questions on the topic of this bulletin or other foreclosure matters, feel free to contact Attorney Matthew Gerdisch (mgerdisch@kmksc.com) of our office, or call (414) 962-5110.
About KMK
Kohner, Mann & Kailas, S.C. (KMK) is a leading mortgage default servicing, business transactions, commercial finance and litigation law firm that provides clients with cost-effective legal support for their business operations. Formed in 1937, KMK blends demonstrable business know-how with the legal issues that arise from doing business in the United States and elsewhere. KMK offers an experienced and sophisticated legal team able to adapt its services to the particular business issues and needs of its clients. Based in Milwaukee, Wis., KMK has a reputation for achieving results in local, national and transnational business disputes and transactions. For more information, please visit: https://kmksc.com.
This memorandum is provided by Kohner, Mann and Kailas, S.C. for educational and informational purposes only and is not intended and should not be construed as legal advice. January 8, 2018.