Chapter 846

846.155(1)(c) (c) “Third-party bidder” means a person that intends to submit a bid at a sale of mortgaged premises and that is not any of the following:

846.155(1)(c)1. 1. A party in the foreclosure action.

846.155(1)(c)2. 2. An agent of a party in the foreclosure action.

846.155(1)(c)3. 3. An assignee of the plaintiff in the foreclosure action.

846.155(2) (2) Minimum bidder qualifications. No 3rd-party bidder may submit a bid at a sale of mortgaged premises unless the 3rd-party bidder meets all of the following qualifications:

846.155(2)(a) (a) The 3rd-party bidder does not own an interest in property in this state against which taxes have been levied that are more than 120 days delinquent.

846.155(2)(b) (b) The 3rd-party bidder is not directly or indirectly owned, managed, or controlled, in whole or in part, by a person that owns an interest in property in this state against which taxes have been levied that are more than 120 days delinquent.

846.155(2)(c) (c) The 3rd-party bidder does not directly or indirectly own, manage, or control, in whole or in part, an entity that owns an interest in property in this state against which taxes have been levied that are more than 120 days delinquent.

846.155(2)(d) (d) No judgment against the 3rd-party bidder related to a violation of a state or local building code with respect to property in this state has been rendered that is unsatisfied.

846.155(2)(e) (e) No judgment against a person that directly or indirectly owns, manages, or controls, in whole or in part, the 3rd-party bidder related to a violation of a state or local building code with respect to property in this state has been rendered that is unsatisfied.

846.155(2)(f) (f) No judgment against an entity directly or indirectly owned, managed, or controlled, in whole or in part, by the 3rd-party bidder related to a violation of a state or local building code with respect to property in this state has been rendered that is unsatisfied.

846.155(2)(g) (g) In submitting a bid at the sale, the 3rd-party bidder is not acting on behalf of or as part of an agreement with a person that does not meet the qualifications described in pars. (a) to (f).

846.155(3) (3) Prebidding acknowledgments. Before allowing a 3rd-party bidder to submit a bid at a sale of mortgaged premises, the sheriff or referee may require the 3rd-party bidder to confirm any of the following:

846.155(3)(a) (a) The 3rd-party bidder meets all of the qualifications described in sub. (2).

846.155(3)(b) (b) If the 3rd-party bidder submits a bid at the sale, the 3rd-party bidder will not assign the bid to a person that, if the person had submitted a bid directly at the sale, would not have met the qualifications described in sub. (2).

846.155(3)(c) (c) If the 3rd-party bidder is the purchaser of the mortgaged premises, the 3rd-party bidder will file the affidavit described in sub. (5).

846.155(3)(d) (d) The 3rd-party bidder is aware that, if a false representation is made in the affidavit described in sub. (5), the 3rd-party bidder, and the individual acting on behalf of the 3rd-party bidder, may be subject to the penalties described in sub. (6) (c) and (d).

846.155(4) (4) Assignment of bid to unqualified bidder prohibited. No person that submits a bid at a sale of mortgaged premises, nor any assignee of that person, may assign that bid to a person that, if the person had submitted a bid directly at the sale, would not have met the qualifications described in sub. (2). This subsection does not apply to an assignment of a bid to the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation.

846.155(5) (5) Filing affidavit of minimum bidder qualifications.

846.155(5)(a) (a) If the grantee of a deed executed under s. 846.16 (1) (a) is not a party in the foreclosure action or the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation, the grantee shall, no later than the time scheduled for confirmation of sale, file with the clerk of court an affidavit affirming that, as of the date on which the affidavit is filed, the grantee meets all of the qualifications described in sub. (2). The affidavit also shall identify the name and street address of a person in this state that is authorized to accept service of process for the grantee. If the grantee is not an individual, an individual who is authorized to act on behalf of the grantee shall sign the affidavit.

846.155(5)(b) (b) The director of state courts shall provide to the clerk of court in each county a form for use in filing affidavits required under this subsection. The form shall require a person that files the affidavit to acknowledge that the person is aware that, if a false representation is made in the affidavit, the person, and the individual who signs the affidavit on behalf of the person, may be subject to the penalties described in sub. (6).

846.155(6) (6) Affidavit required for confirmation of sale; penalties for false representations.

846.155(6)(a) (a) If a grantee of a deed executed under s. 846.16 (1) (a) is not a party in the foreclosure action or the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation, the court may not confirm the sale until the grantee files the affidavit required under sub. (5).

846.155(6)(b) (b) At any time before the court confirms a sale of mortgaged premises, a party in the foreclosure action or the city, village, town, or county where the mortgaged premises are located may provide to the court testimony or evidence that the affidavit filed by a grantee under sub. (5) contains a false representation.

846.155(6)(c) (c) If the court determines that the affidavit filed by a grantee under sub. (5) contains a false representation, the court may refuse to confirm the sale and may order all of the following:

846.155(6)(c)1. 1. That the grantee shall forfeit the amount of the deposit or down payment delivered to the clerk of court under s. 846.16 (1r) (b).

846.155(6)(c)2. 2. That the clerk of court shall pay the amount forfeited under subd. 1. to the parties that would be entitled to the proceeds of the sale as ordered by the court.

846.155(6)(c)3. 3. That the mortgaged premises shall be resold.

846.155(6)(c)4. 4. That the clerk of court shall destroy the deed executed to the purchaser, and that deed is of no effect.

846.155(6)(d) (d) If the court determines that the affidavit filed by a grantee under sub. (5) contains a false representation that was made knowingly, in addition to any of the penalties imposed under par. (c), the court may order the grantee, the individual who signed the affidavit on behalf of the grantee, or both to forfeit up to $1,000 and may bar the grantee, the individual who signed the affidavit on behalf of the grantee, or both from submitting a bid at any sale of mortgaged premises conducted in the county for a period of time not to exceed one year from the date on which the order is entered.

846.155 History History: 2017 a. 339; 2021 a. 238 s. 45.

846.16 846.16 Notice of sale; sale; confirmation; transfer.

846.16(1) (1) Notice of sale.

846.16(1)(a) (a) Notice of in-person sale. Except as provided in par. (bm), the sheriff or referee who makes sale of mortgaged premises, under a judgment therefor, shall give notice of the time and place of sale as provided under s. 815.31 or in such other manner as the court shall in the judgment direct. The sheriff or referee shall include in the notice of sale the street address, if any, of the real estate to be sold and the sum of the judgment.

846.16(1)(bm) (bm) Notice of Internet-based sale. If a sale is conducted under sub. (1g) (b), the sheriff or referee who makes sale of mortgaged premises shall give notice of the time and place of sale as provided under par. (a), except as follows:

846.16(1)(bm)1. 1. Section 815.31 (1) does not apply to the sale. The sheriff or referee shall publicly advertise the time and place of holding the sale by posting, at least 3 weeks prior to the date of the sale, a written notice describing the mortgaged premises to be sold with reasonable certainty in one public place in the city, village, or town where the mortgaged premises are located and, if the county where the mortgaged premises are located maintains an Internet site, on that Internet site. If the city, village, or town where the mortgaged premises are located maintains an Internet site, the city, village, or town may post the notice on that Internet site.

846.16(1)(bm)2. 2. The notice also shall include all of the following information:

846.16(1)(bm)2.a. a. A statement that the sale will be conducted using an Internet-based auction.

846.16(1)(bm)2.b. b. The address of the Internet site where the Internet-based auction will be conducted.

846.16(1)(bm)2.c. c. The time period during which bids for the mortgaged premises may be submitted.

846.16(1)(bm)2.d. d. Instructions on how the general public may observe the Internet-based auction and on how a person may participate in the auction, including any prerequisites to participation that may apply, or the address of an Internet site where those instructions are posted.

846.16(1)(bm)2.e. e. A description of the terms of sale that apply to the Internet-based auction, including a description of any lien or other encumbrance on the mortgaged premises that has priority over the mortgage that is the subject of the foreclosure action.

846.16(1)(cm) (cm) Notice to department of veterans affairs. In addition to providing notice of sale under par. (a) or (bm), if the department of veterans affairs is a party in the foreclosure action, the judgment shall direct that notice of sale be given by registered mail, return receipt requested, to the department at Madison, Wisconsin, at least 3 weeks prior to the date of sale.

846.16(1)(d) (d) In any public place or on any Internet site where the sheriff or referee posts a notice of sale, the sheriff or referee also shall post an explanation regarding the minimum bidder qualifications under s. 846.155 (2) that a participant in the sale must meet and a statement that, before the sale may be confirmed, a purchaser that is not a party in the foreclosure action must submit an affidavit to the court affirming that the purchaser meets those minimum bidder qualifications.

846.16(1g) (1g) Sale of mortgaged premises.

846.16(1g)(a) (a) Payment of purchase price and costs of sale; deposit or down payment.

846.16(1g)(a)1. 1. Except as provided under subd. 2. and this subdivision, the sheriff or referee may not accept less than $100 as a deposit or down payment from the purchaser at a sale of mortgaged premises. The sheriff or referee shall deliver the amount of the deposit or down payment to the clerk of court as provided in sub. (1r) (b) 2. b., and the purchaser shall pay the balance of the purchase price to the clerk of court upon the confirmation of the sale as provided in sub. (2m) (b). If the highest bid is less than $100, the purchaser shall give the bid amount as a deposit or down payment, and the sheriff or referee shall deliver the entire amount to the clerk of court.

846.16(1g)(a)2. 2. If the judgment creditor is the purchaser at a sale of mortgaged premises, the judgment creditor may give the judgment creditor’s receipt to the sheriff or referee for any sum not exceeding the sum due to the judgment creditor. The judgment creditor’s receipt is considered a down payment. If the judgment creditor is the purchaser and the sum due to the judgment creditor is less than the purchase price, the judgment creditor shall pay the difference to the sheriff or referee at the time of sale.

846.16(1g)(a)3. 3. In all cases, the purchaser at the sale of the mortgaged premises shall pay the cost of sale.

846.16(1g)(b) (b) Internet-based sale.

846.16(1g)(b)1. 1. A county may enact an ordinance that requires the sheriff or referee to conduct, or to engage an auctioneer registered under ch. 480 to conduct, sales of mortgaged premises in the county using an Internet-based auction. If a county enacts such an ordinance, all sales of mortgaged premises in the county shall be conducted using Internet-based auctions.

846.16(1g)(b)2. 2. If a sale is conducted using an Internet-based auction, the person conducting the sale may accept payment of any amounts under par. (a) by credit card, debit card, or other electronic payment method and may charge a surcharge to the payer to recover charges associated with accepting the electronic payment.

846.16(1g)(b)3. 3. If a sale is conducted using an Internet-based auction, the person conducting the sale shall, on the Internet site on which the Internet-based auction is conducted, provide any potential bidder with a conspicuous statement identifying any lien or other encumbrance described in the notice under sub. (1) (bm) 2. e.

846.16(1r) (1r) Procedures after sale.

846.16(1r)(a) (a) Execution of deed. After a sale of mortgaged premises under sub. (1g) and upon compliance with the terms of the sale, the sheriff or referee shall make and execute to the purchaser, the purchaser’s assigns, or personal representatives a deed of the mortgaged premises sold that sets forth each parcel of land sold to the purchaser and the purchase price paid for each parcel.

846.16(1r)(b) (b) Deductions from proceeds; transmittals to clerk of court. No later than 10 days after a sale of mortgaged premises under sub. (1g), the sheriff or referee shall do all of the following:

846.16(1r)(b)1. 1. File a report of the sale with the clerk of court.

846.16(1r)(b)2. 2. Deliver to the clerk of court all of the following:

846.16(1r)(b)2.a. a. The deed to the mortgaged premises executed under par. (a).

846.16(1r)(b)2.b. b. After deducting the costs and expenses of the sale, unless the court orders otherwise, the proceeds of the sale ordered by the court.

846.16(1r)(c) (c) Deed held until confirmation. The clerk of court shall hold a deed delivered to the clerk of court under par. (b) 2. a. until confirmation of the sale under sub. (2m).

846.16(2m) (2m) Confirmation.

846.16(2m)(a) (a) Preparation of real estate transfer return. If the purchaser is not the judgment creditor, before the court may confirm the sale, the purchaser shall provide the judgment creditor with any information required for the judgment creditor to complete the real estate transfer return under s. 77.22.

846.16(2m)(ae) (ae) Determination of fair value of mortgaged premises. If mortgaged premises sell for less than the amount due and to become due on the mortgage debt and costs of sale, there is no presumption that the mortgaged premises sold for their fair value, and the court may not confirm the sale or render a judgment for deficiency until the court is satisfied that the fair value of the mortgaged premises sold has been credited on the mortgage debt, interest, and costs.

846.16(2m)(am) (am) Payment of sale proceeds upon confirmation. Upon confirmation of a sale of mortgaged premises, the clerk of court shall pay to the parties entitled thereto, or to their attorneys, the proceeds of the sale.

846.16(2m)(as) (as) Effect of deed upon confirmation. Unless the deed is destroyed as provided in sub. (4) (a), upon confirmation of a sale of mortgaged premises, the deed executed under sub. (1r) (a) shall vest in the purchaser, the purchaser’s assigns, or personal representatives all the right, title, and interest of the mortgagor, the mortgagor’s heirs, personal representatives, and assigns in and to the premises sold and is a bar to all claim, right of equity of redemption therein, of and against the parties to the action, their heirs, personal representatives, and all persons claiming under them subsequent to the filing of the notice of the pendency of the action in which such judgment was rendered; and the purchaser, the purchaser’s heirs, or assigns shall be let into the possession of the premises so sold on production of the deed or a duly certified copy of the deed, and the court may, if necessary, issue a writ of assistance to deliver that possession.

846.16(2m)(b) (b) Payments by purchaser. No later than 10 days after the court confirms the sale, the purchaser shall pay to the court all of the following:

846.16(2m)(b)1. 1. The amount of the transfer fee under s. 77.22, if any.

846.16(2m)(b)2. 2. The amount of the fee under s. 59.43 (2) to record all of the following:

846.16(2m)(b)2.a. a. The deed to the mortgaged premises delivered under sub. (1r) (b) 2. a.

846.16(2m)(b)2.b. b. Any other document required for the register of deeds to record the deed.

846.16(2m)(b)3. 3. Any part of the purchase price remaining to be paid.

846.16(2m)(c) (c) Delivery of real estate transfer return receipt. No later than 10 days after the court confirms the sale, the judgment creditor shall provide to the court the receipt for submitting a transfer return under s. 77.22.

846.16(3m) (3m) Transmittal to register of deeds. Upon the court confirming a sale of mortgaged premises and upon compliance by the purchaser with the terms of the sale and the payment of any balance of the sale price to be paid, unless otherwise ordered by the court, the clerk of court shall do one of the following to transmit the deed to the mortgaged premises received under sub. (1r) (b) 2. a. to the register of deeds for recording:

846.16(3m)(am) (am) Deliver the deed to the mortgaged premises received under sub. (1r) (b) 2. a., the receipt for submitting a transfer return under s. 77.22, the amount due under s. 59.43 (2) to record the deed and any other document required to record the deed, and the transfer fee, if any, to the register of deeds.

846.16(3m)(bm) (bm) Notify the register of deeds that the deed to the mortgaged premises received under sub. (1r) (b) 2. a., the receipt for submitting a transfer return under s. 77.22, the amount due under s. 59.43 (2) to record the deed and any other document required to record the deed, and the transfer fee, if any, are available in the clerk’s office. If a register of deeds is notified under this paragraph, the register of deeds shall retrieve the documents and fees from the clerk of courts within a reasonable period of time.

846.16(4) (4) No confirmation of sale; effect of failure to comply with confirmation requirements; resale.

846.16(4)(a) (a) If any of the requirements under sub. (2m) (a) and (b) are not satisfied and the purchaser is not the judgment creditor, the court shall order the purchaser to forfeit the amount of the purchaser’s deposit or down payment delivered to the clerk of court under sub. (1r) (b) 2. b., and the clerk of court shall pay that amount to the parties that would be entitled to the proceeds of the sale as ordered by the court. The court shall also order that the mortgaged premises be resold. The clerk of court shall destroy the deed executed to the defaulting purchaser under sub. (1r) (a), and that deed is of no effect.

846.16(4)(b) (b) If any of the requirements under sub. (2m) (b) and (c) are not satisfied and the purchaser is the judgment creditor, the court may order the purchaser to forfeit the greater of the purchaser’s deposit or $500 and order the purchaser to comply with sub. (2m) (b) and (c) so that the mortgaged property may be sold to the purchaser.

846.16(4)(c) (c) If the court does not confirm a sale of mortgaged premises for a reason other than a failure to satisfy a requirement under sub. (2m) (a), (b), or (c), the clerk of court shall return the deposit or down payment delivered to the clerk of court under sub. (1r) (b) 2. b. to the purchaser, and the court shall order the mortgaged premises to be resold. The clerk of court shall destroy the deed received under sub. (1r) (b) 2. a., and that deed is of no effect.

846.16 History History: 1973 c. 189 s. 7; Stats. 1973 s. 816.16; Sup. Ct. Order, 67 Wis. 2d 585, 768 (1975); Stats. 1975 s. 846.16; 1989 a. 31; 1993 a. 486; 2015 a. 60; 2017 a. 104 ss. 10 to 20, 22 to 26; 2017 a. 208 ss. 10 to 34, 36; 2017 a. 339; 2017 a. 364 s. 49; 2021 a. 238 s. 45.

846.16 Annotation The trial court should determine “fair value” under s. 846.165 (2) [now s. 846.16 (2m) (ae)] even though the bid does not shock the court’s conscience. First Wisconsin National Bank of Oshkosh v. KSW Inv. 71 Wis. 2d 359, 238 N.W.2d 123 (1976).

846.16 Annotation The trial court did not abuse its discretion in setting aside a judicial sale when the buyer based its bid on incorrect figures in the judgment of foreclosure. Family Savings and Loan Asso. v. Barkwood Landscaping Co., Inc. 93 Wis. 2d 190, 286 N.W.2d 581 (1980).

846.16 Annotation An appeal from an order confirming sale does not enable the appellant to challenge a judgment of foreclosure. Shuput v. Lauer, 109 Wis. 2d 164, 325 N.W.2d 321 (1982).

846.16 Annotation There is no statutory requirement that sale proceeds be applied first to the portion of the debt that is guaranteed. Crown Life Ins. Co. v. LaBonte, 111 Wis. 2d 26, 330 N.W.2d 201 (1983).

846.16 Annotation “Fair value” under s. 846.165 (2) [now s. 846.16 (2m) (ae)] is determined by the property’s sale value. The court may consider costs of selling, holding, or carrying the property only to the extent that they affect the sale value. First Financial Savings Assoc. v. Spranger, 156 Wis. 2d 440, 456 N.W.2d 897 (Ct. App. 1990).

846.16 Annotation That the balance of the purchase price be paid within 10 days of confirmation of sale or be forfeited is mandatory and is not waivable by the court as a matter of equity. The purchaser has a right to notice of when the sale has been confirmed, when the mortgagor’s redemption period ends, and when the 10-day payment period expires. GMAC Mortgage Corp. v. Gisvold, 215 Wis. 2d 459, 572 N.W.2d 466 (1998), 96-1663.

846.16 Annotation Because s. 703.10 (6) prohibits condominium bylaws from affecting the transfer of title to a condominium unit, a bylaw prohibiting the sale of any unit to an owner who would not reside in the unit could not be applied to prevent the confirmation of a foreclosure sale to the high bidder who admitted he would not occupy the premises. Also, the potential failure to occupy the unit had no recognized legal relationship to the confirmation of the sheriff’s sale and the transfer of title. Bankers Trust Company of California, N.A. v. Bregant, 2003 WI App 86, 261 Wis. 2d 855, 661 N.W.2d 498, 02-2085.

846.16 Annotation Under s. 846.165 (2) [now s. 846.16 (2m) (ae)], when a creditor seeks a deficiency judgment, there is no presumption that the property sold for fair value. From that, it follows that when the mortgagee does not seek a deficiency judgment, there is a presumption. The statute does not eliminate the requirement that the court find fair value. A tax assessment, like an appraisal, can be viewed as a measure of fair value. Each case must be considered on its merits. Bank of New York v. Mills, 2004 WI App 60, 270 Wis. 2d 790, 678 N.W.2d 332, 03-1339.