Foreclosure in Racine>Question Details

Karen, Home Buyer in Racine, WI

In a forclosure, what is meant by "No deficiency judgment; 6 month redemption period"?

Asked by Karen, Racine, WI Tue Mar 2, 2010

In a forclosure, what is meant by "No deficiency judgment; 6 month redemption period"?

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There are two types of foreclosures: judicial and non judical. If the bank files a foreclose action and completes a judicial foreclosure action they reserve their rights to go after the deficiency in liquidating the property. This deficiency hold the borrower responsible for the loss or short fall. This actions take a lot longer on a primary residence. The redeption period for a judicial foreclosure is 1 year.

A non judical foreclosure is done without reserving the deficiency rights and the redemption period is usually 6 months in Wisconsin.

The redeption period starts after the first legal action is completed in a foreclosure action and a summary judgement is entered. Typically from default to foreclosure sale and confirmation it takes 410 days for an non judical foreclosures.

If there is a second mortgage there may be other issues and concerns for the owner of the home that they may need to take into consideration.



Keith Manson
First WeberGroup
Certified Distressed Property Expert
Metro Milwaukeee
2 votes Thank Flag Link Tue Mar 2, 2010
Hi Karen,

The answers given previously are very good in general terms. However, as Keith Manson mentioned, every foreclosure has its own timetable depending upon its unique circumstances. I have included a link to one site that I have found that may be helpful to your understanding of the foreclosure process. Its perspective is geared toward the owner that is being foreclosed upon, but it provides some very useful information.

http://www.stop-foreclosure-services.com/Wisconsin-foreclosu…

Hope this helps!

David Bellovary
Broker Associate
Certified Distressed Property Expert
RE/MAX Newport Realty Corp
dbellovary@wi.rr.com
Racine, WI
0 votes Thank Flag Link Tue Mar 2, 2010
Keith Manson gave you a good answer. Because the length of time of a judicial foreclosure process, it seems to be used less, even though, theoretically, the lender could squeeze more money out of the borrower. Mostly, the borrower has been all squeezed out already, though.
0 votes Thank Flag Link Tue Mar 2, 2010
A deficiency judgment is the difference between the amount that the lender receives on a short sale and the amount owed on the property. in most states, the lender has the right to pursue the homeowner to pay that difference. But a "no deficiency judgment" means that the lender is giving up their right to go after the homeowner anytime in the future to collect any additional money.

Some states, like Michigan, have a 6-month redemption period. This is the period immediately following the sheriff's sale (or foreclosure sale) where the homeowner has the right to redeem the proprty for the amount of money that the lender paid at the sheriff's sale. Usually, the lender will pay the full amount that is owed on the mortgage plus late fees and legal cost to purchase back the property. This would be the amount that the homeowner would have to pay to get their property back. But about 30% of the time, the lender will "underbid". That means that the amount that they pay for the house at sheriff's sale is far lower than what is actually owed on the mortgage. In these cases, the homeower can buy back (redeem) their property for that amount. Or, the homeower can sell their property, payoff the lender that smaller "underbid" amount and keep any money that is left over.
Web Reference: http://kaperproperties.com/
0 votes Thank Flag Link Tue Mar 2, 2010
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