Chapter 428

CHAPTER 428

FIRST LIEN REAL ESTATE AND OTHER MORTGAGE LOANS

SUBCHAPTER I

FIRST LIEN REAL ESTATE LOANS

428.101   Applicability.

428.102   Definitions.

428.103   Limitations.

428.104   Receipts, accounting.

428.105   Pleadings.

428.106   Remedies.

SUBCHAPTER II

RESPONSIBLE HIGH COST MORTGAGE LENDING

428.202   Definitions.

428.203   Prohibitions on and requirements of lenders and assignees.

428.204   False statements.

428.206   Recommending default.

428.207   Prepayment.

428.208   Disclosure to customers.

428.209   Exclusive state regulation authority.

428.2095   Property exempt from debt collection.

428.210   Administration and penalties.

428.211   Exemption for depository institutions.

subch. I of ch. 428 SUBCHAPTER I

FIRST LIEN REAL ESTATE LOANS

428.101 428.101 Applicability. This subchapter applies to:

428.101(1) (1) Loans made on or after April 6, 1980 and prior to November 1, 1981, by a creditor other than a savings and loan association to a customer and which are secured by a first lien real estate mortgage or equivalent security interest if the amount financed is $25,000 or less.

428.101(2) (2) Loans made prior to April 6, 1980, by a creditor other than a savings and loan association and loans made before November 1, 1981, by a savings and loan association to a customer and which are secured by a first lien real estate mortgage or equivalent security interest if the annual percentage rate does not exceed 12 percent per year and the amount financed is $25,000 or less.

428.101(3) (3) Loans made on or after November 1, 1981, by a creditor to a customer and which are secured by a first lien real estate mortgage or equivalent security interest if the amount financed is $25,000 or less.

428.101 History History: 1973 c. 18; 1979 c. 110 s. 60 (13); 1979 c. 168; 1981 c. 45; 2003 a. 257; 2005 a. 215.

428.101 Annotation A second mortgage constitutes an equivalent security interest under this section when held by a savings and loan association that holds the first mortgage and there are no intervening liens. 63 Atty. Gen. 557.

428.102 428.102 Definitions. In this subchapter:

428.102(1) (1) “Amount financed” means that term as defined in the federal consumer credit protection act, as defined in s. 421.301 (19).

428.102(2) (2) “Creditor” means a person who regularly engages in, arranges for or procures from 3rd persons, loans within the scope of this subchapter.

428.102(3) (3) “Customer” means a person other than an organization who seeks or acquires credit financing secured by a first lien real estate mortgage, or equivalent security interest, for personal, family, household or agricultural purposes.

428.102(4) (4) “Loan” means the creation of debt by the creditor’s payment of or agreement to pay money to the customer or to a 3rd party for the account of the customer, or a forbearance by a lender of a debt arising from a loan.

428.102(5) (5) “Organization” means organization as defined in s. 421.301 (28).

428.102(6) (6) “Person” means person as defined in s. 421.301 (31).

428.102 History History: 1973 c. 18, 232; 2003 a. 257.

428.102 Annotation A sale of a time-share on credit constituted a loan within the meaning of ch. 428 although the seller did not advance funds to the buyer. The seller’s forbearance of the balance of the purchase price at the time of closing comes within the sub. (4) definition of a loan. Ott v. Peppertree Resort Villas, Inc., 2006 WI App 77, 292 Wis. 2d 173, 716 N.W.2d 127, 04-1226.

428.103 428.103 Limitations.

428.103(1) (1) The following limitations shall apply to all loans subject to this subchapter:

428.103(1)(a) (a) No delinquency charge may be collected on an installment which is paid in full on or before the 10th day after its scheduled due date even though an earlier maturing installment may not have been paid in full. For purposes of this section payments are applied first to current installments and then to delinquent installments.

428.103(1)(b) (b) Any cosigner, other than the spouse of the customer, shall be given a notice substantially the same as that required by s. 422.305, and the cosigner shall be entitled to a copy of any document evidencing the obligation to pay the debt.

428.103(1)(c) (c) With respect to debt collection:

428.103(1)(c)1. 1. No creditor shall engage in conduct of the type prohibited by s. 427.104 (1) (a) to (L).

428.103(1)(c)2. 2. The exemptions specified in s. 425.106 (1) (a) and (b), with respect to earnings and personal clothing and furnishings except as to fixtures, shall apply.

428.103(1)(d) (d) No creditor may take a security interest in the household goods or furnishings, other than fixtures, of a customer.

428.103(1)(e) (e) The creditor shall not contract for or charge its attorney fees to the customer except as follows:

428.103(1)(e)1. 1. Reasonable fees for opinions of title.

428.103(1)(e)2. 2. In foreclosure cases, 5 percent of the amount adjudged due the creditor; or if the dispute is settled prior to judgment, a reasonable fee based on the time, nature and extent of the work involved, but not to exceed 2-1/2 percent of the unpaid principal balance of the loan.

428.103(2) (2) A person who commits a violation of this section is liable to the customer in an amount equal to the greater of:

428.103(2)(a) (a) Twice the amount of the interest to be charged on the transaction, except that the liability under this subsection shall not be less than $100 nor greater than $1,000; or

428.103(2)(b) (b) The actual damages, including any incidental and consequential damages, sustained by the customer by reason of the violation.

428.103 History History: 1973 c. 18; Sup. Ct. Order, 67 Wis. 2d 585, 767 (1975); 1983 a. 92; 1991 a. 316; 1993 a. 80, 490; 2003 a. 257.

428.104 428.104 Receipts, accounting.

428.104(1) (1) Any time a payment is made in cash, or any other time the method of payment does not itself provide evidence of payment, the creditor shall furnish the customer, without request, a written receipt, evidencing such payment. The customer shall be entitled upon request, free of charge, to an annual statement of account showing receipts and disbursements. Subject to s. 708.15, upon payment in full of the customer’s obligation, the creditor shall release any mortgage by either recording the necessary instrument and forwarding the same to the customer, or by forwarding a satisfaction of such debt to the purchaser of the real property subject to such satisfied mortgage, or the creditor of such purchaser.

428.104(2) (2) A person who commits a violation of this section is liable to the customer in an amount equal to:

428.104(2)(a) (a) Twenty-five dollars; and