Following up on the blog from last week, I guess I am beating a dead horse – but the whip is out… As discussed last week, under §846.13, Wis. Stats., as interpreted by the courts, an owner under a foreclosure action may redeem and sell the mortgaged premises at any time before the confirmation of sale by paying the full amount due to the lender, including costs.
Following up on the blog from last week, I guess I am beating a dead horse – but the whip is out…
As discussed last week, under §846.13, Wis. Stats., as interpreted by the courts, an owner under a foreclosure action may redeem and sell the mortgaged premises at any time before the confirmation of sale by paying the full amount due to the lender, including costs.
The issue this week is who should the redeeming owner tell about the redemption? Answer – although the redeeming owner has no obligation other than to pay the outstanding amounts, the owner should be proud and stand on a pedestal and shout to the world “I have redeemed! I own this property!” The owner should tell the world about the payment – tell the lender, tell the lender’s foreclosing attorney and if the confirmation hearing is scheduled tell the court or, better yet, appear at the confirmation hearing and tell the judge directly.
Unfortunately in Osterberg v. Lincoln State Bank, 2006 WI App 237 (dated and filed October 4, 2006), the owner did not tell the world and litigation commenced. The owner paid the foreclosing lender in full 10 days before the confirmation of sale, but the foreclosing lender was not made aware of the payment and thus did not tell the circuit court. The circuit court confirmed the sheriff’s sale. Approximately 15 days after confirmation the foreclosing lender realized the mistake and asked the circuit court to decide who owned the property – the owner who paid the foreclosing lender or the purchaser at the sheriff’s sale. The Court of Appeals concluded that the owner who redeemed and paid the foreclosing lender owned the property on the timely payment to the lender and, further, the owner had no obligation to notify the circuit court about the redemption.
The facts of the Osterberg may be unique, as hopefully foreclosing attorneys are advised by their clients that full payment has been made; however, in light of the record number of foreclosures and the burdens now placed on lenders who are folding at the same time that their outstanding mortgages are being foreclosed, if a property is redeemed at or near the time of the confirmation sale the owner should be proud and shout from the Heavens “I have redeemed!” – or at the very least tell the circuit court.
Please do not take this blog as casting stones at the owner in Osterberg, as the owner did all that was required to redeem the property and it was more than reasonable for the owner to presume that once the lender was paid the lender would notify the foreclosing attorney; the intent of this blog is to point out that miscommunication can happen between a lender and its foreclosing attorney and owners that do not wish to become embroiled in litigation may want to take the extra step of stopping a confirmation hearing when payment is made.