What are the legal consequences of a foreclosure?

Foreclosure is a legal process where a lender is allowed to take a home or other real estate property from a homeowner who has failed to make payments on their loan. In Wisconsin, the legal consequences of a foreclosure depends on the type of loan and the laws in the particular county. Generally speaking, the legal consequences of a foreclosure in Wisconsin are a negative impact to the homeowner’s credit score, a deficiency balance owed to the lender, and the repossession of the homeowner’s home. When a homeowner has not been able to make their loan payments and the foreclosure process begins, the homeowner’s credit score—which determines their creditworthiness—is likely to take a hit. This will make it harder for the homeowner to obtain credit in the future. Additionally, after the foreclosure, the lender may sue the homeowner for the remaining loan balance, called a deficiency balance, which could lead to a lien being placed on the homeowner’s other property. Finally, the most immediate consequence of a foreclosure is the repossession of the homeowner’s home. During this process, the homeowner must move out of the home, and the lender will be allowed to sell the home for the remaining loan balance to recover some of their losses. Although the legal consequences of foreclosures in Wisconsin are quite serious, homeowners can also take preventive measures against foreclosure such as talking to their lender and researching state and county foreclosure laws.

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