A foreclosing party can reduce a mortgagors’ right to redeem property from twelve months to six months if the foreclosing party waives the right to receive a deficiency judgment. When two mortgages exist, foreclosing on one mortgage and seeking money on the other mortgage will not impact the foreclosing party’s right to a six month redemption period.
This is what the Wisconsin Court of Appeals, District III, held in Harbor Credit Union v. Samp, 2010AP974(Feb. 17, 2011). In that case, Harbor Credit Union held two mortgages on the same property. The first mortgage was the result of a loan in the approximate amount of $275,000.00. The second mortgage was the result of a loan in the approximate amount of $125,000.00. The mortgagor defaulted on his obligations on the loans and in March 2009 Harbor Credit Union brought a foreclosure action on the first mortgage. Harbor Credit Union elected to waive the right to receive a deficiency judgment on the first mortgage and the redemption period was shortened from twelve months to six months. In June 2009, the circuit court granted Harbor Credit Union a judgment of foreclosure, with a redemption period of six months and no deficiency judgment. The circuit court did not say anything about the second mortgage other than it was junior to the first mortgage.
In December 2009, Harbor Credit Union initiated a seperate action seeking a money judgment only on the second mortgage. Two weeks later, more than six months after the foreclosure judgment on the first mortgage was entered, a sheriff’s sale was conducted and Harbor Credit Union submitted the only bid on the property for $411,000.00 and thereafter moved the court for confirmation of the sale. Harbor Credit Union submitted that there was no deficiency on the first mortgage and the money judgment on the second mortgage would also be satisfied from the proceeds of the sale. The circuit court confirmed the sale but the mortgagor wished to redeem the property the same day by paying the sale amount. The court held open the mortgagors’ right to redeem until the end of that day and then confirmed the judgment.
The mortgagor did not redeem that same day but later filed a motion to vacate the order confirming the sale claiming that the money judgment that Harbor Credit Union received on the second mortgage amounted to a deficiency judgment and therefore Harbor Credit Union was not allowed a six month redemption period. The cicuit court denied the mortgagors’ motion and he appealed. The Court of Appeals affirmed by concluding that a money judgment obtained on a second mortgage does not amount to a deficiency judgment for purposes of the foreclosure action.
In Woelfel v. Homestead Mutual Insurance, Docket: 2009AP002104 03-02-11, the Wisconsin Court of Appeals examined a case where it was alleged that an insurance company failed to properly investigate the case of a collapsing feed silo. Neighbors heard a loud “boom” or “whoosh” when the feed silo collapsed. An investigator for the farmers insurance company performed a cursory investigation and determined that the silo collapsed due to structural problems. The court found that the investigation was so bad that it amounted to no investigation at all. The investigator reach flatly unsupportable conclusions as to the cause of the collapse and quickly determined–conveniently– that the collapse was “not covered” under the policy. A more diligent investigation would have determined that the collapse was due to an explosion and fire. Evidence establishing an explosion caused the collapse was ignored by the insurance company. The trial court found that the claim was covered and further as a punishment for the sham “investigation” it awarded punitive damages of $700,000 in addition to damages for loss of the silo. The court found that the insurance company had gone into “pre-denial” mode before even visiting the site for inspection. On appeal the court of appeal upheld the trial court ruling finding that the insurance company conducted its investigation in such a way as to prevent it from learning the true facts upon which the claim was based.
Often times when an insurance claims for property damages arise the insurance company will retain and employ independant “experts” with substantial credentials. However many times these experts do work exclusively for insurance companies and predictably often render opinions that result in a determination of “no coverage” under the applicable insurance policy. You are entitled to retain your own independent expert to determine causation. Our firm routinely deals with such cases. Don’t let the insurance company white wash an investigation. If you believe your claim is covered but the insurance company and its “expert” are telling you otherwise do not hesitate to call David or Warren at our office.
A recent decision from Massachusetts’ highest court could impact courts across the country. It is the first state supreme court to rule that only the holder of a mortgage may foreclose on a property. The opinion invalidates foreclosure sales by two banks that had been assigned mortgages on the properties, and calls into question the validity of countless other foreclosures across the country. In the decision, Judge Ralph D. Gants wrote that the foreclosure sales in question were invalid because the banks failed to show that they held the mortgages at the time of foreclosure. “As a result,” he said, “they did not demonstrate that the foreclosure sales were valid to convey title to the subject properties.” The banks had claimed that “securitization documents” they submitted established valid assignments that made them the holders of the two mortgages before the notice of sale and the foreclosure sale. But the court disagreed. A “foreclosing entity must hold the mortgage at the time of the notice and sale” to establish authority to foreclose.”
In Boerst v. Opperman, 2011 WI 5 (Feb. 3, 2011), a unanimous Wisconsin Supreme Court – in an opinion written by Chief Justice Shirley Abrahamson decided that where property owners considered a road between thier respective properties the true boundary for over 100 years, that the road in effect, became the boundary. This was the case even though boundary markers indicated that the boundaries were different. The decision is interesting in that it shows the operation of laws can vary the explicit legal description recorded or reflected in boundary markers. You may have boundary disputes with your neighbors, or problems concerning easements. Often times where you think the boundary is, is different that what your neighbor thinks. Further a judge may disagree with both property owners. Our firm routinely assists our clients with boundary disputes, easements and judicial declaration of rights in real estate.