What does it mean to redeem a home?

On Behalf of | Oct 8, 2021 | Consumer Protection |

You do your best to keep up with your mortgage payments, but sometimes circumstances intervene. You may have lost your job or suffered an injury. Your resulting inability to meet your payments puts your home at risk of foreclosure. However, thanks to Wisconsin’s foreclosure laws, you have options to save your home. One way is to redeem it.

You may have heard that some states have a redemption period. This allows people who lost their home to foreclosure the option to buy it back after a foreclosure sale. Wisconsin is different because you must purchase your home back before the foreclosure sale takes place.

The process of redeeming a house

As part of a foreclosure, your lender will file a lawsuit in court to get approval to foreclose on your home. However, according to Wisconsin Statute 846.13, you have the right to redeem your home by paying back the judgment amount handed down by the court as well as interest, taxes and any costs incurred by your lender after the judgment.

Who you pay will depend on the circumstances of the foreclosure. You may pay the clerk of the court that had handed down the judgment or you may directly pay your lender. You might also pay the assignee of your lender.

The length of a redemption period

Keep a close eye on how much time you will have to redeem your home. Wisconsin law allows for a wide variety of redemption time periods depending on the situation regarding your foreclosure. Some mortgages have a twelve-month period, though a lender may shorten it to six months by waiving the right to a deficiency judgment.

It is possible you may ask a court to extend a redemption period from six months to eight months if you have good faith reasons to do so. However, redemption periods can also be as short as five weeks. This may happen if you move out of the home for good.

Be aware of your options

Wisconsin’s redemption laws may work for you, but they will differ according to your situation. If possible, you might head off the need to redeem your home by working on a solution with your lender, such as loan refinancing or reinstating the loan. Still, the state’s foreclosure laws put foreclosure under the jurisdiction of the courts, so you have legal recourse if you seek to save your home.