A task force appointed earlier this year by Assembly Speaker Mike Sheridan has advanced recommendations for legislative and non-legislative programs designed to address the dramatic rise in home foreclosures in Wisconsin. The Wisconsin REALTORS® Association had representation on the task force and supports its report.
The task force was formed to investigate ways the state could constructively address the nearly 30-percent increase in Wisconsin’s foreclosure rate between 2008-2009. The task force correctly identified unemployment, divorce and serious illness as the primary causes of foreclosures, but also reviewed the role of sub-prime lending practices and other financing-related causes. The task force held public hearings across the state, receiving testimony from affected individuals as well as housing and banking experts in Madison, Green Bay, Milwaukee, Baraboo and Eau Claire.
The WRA was ably represented on the task force by REALTOR® Laurie Logan from the Madison area. Laurie brought her extensive experience and expertise to the task force, and devoted a substantial amount of time counseling the group on both useful and not so useful ideas throughout the process. The task force remains in place in order to review additional information and possible future recommendations. Its report, released on September 9, 2009, included the following legislative as well as non-legislative recommendations.
Legislative Recommendations
Mortgage & Foreclosure Education Standards
In an effort to educate consumers on the risks and benefits of various mortgage options, require an overview of mortgage instruments, the risks and benefits of each, and the causes of home foreclosures to be incorporated into the model academic standards for personal financial literacy.
Appraiser Licensure
In an effort to address inaccurate and possible fraudulent appraisals, require all appraisers in Wisconsin to be licensed by the state. Wisconsin is one of only four states that do not require appraisers to be “licensed.”
Abandonment Notification
In an attempt to expedite the foreclosure process to minimize the length of time a property sits vacant, require a county clerk of courts to notify a municipal clerk when a home has been declared abandoned through the necessary judicial process.
Fiduciary Duties of Mortgage Brokers
In order to protect consumers seeking mortgage loans, require mortgage brokers to place their clients’ financial interests above their own, similar to what is required for real estate brokers.
Non-Legislative Recommendations
Encourage Schools to Focus on Financial Literacy
Recommend that school districts in Wisconsin be encouraged to focus on financial literacy issues and, where beneficial, encourage schools to partner with outside financial literacy organizations to educate students on personal financial issues including mortgage and foreclosure topics.
Encourage Statewide Foreclosure Education Campaign
Create a statewide foreclosure education campaign, including information resources available to the public, as well as past and future legislation to provide homeowner and renter protections. As part of this process, identify the Wisconsin Housing and Economic Development Authority as the central source of information and expand its current foreclosure education Web site. In addition, encourage legislators to incorporate foreclosure education into their public service announcements, newsletters and other communications with constituents.
Study Issues of Lenders Abandoning Foreclosed Properties
Recommend further study for solutions for instances in which lenders sue for foreclosure but then never take title. In these cases, the original homeowner is left holding the title while under the impression the house is no longer his or hers. This also leaves municipalities with back taxes, fees and other related costs.
Study Issue of Renter/Non-owner-occupied Foreclosures
Recommend further study of the unique circumstances surrounding foreclosures of rental properties and procedures involving tenants. (The task force noted that legislation known as the Tenant Protection Act has already passed the Legislature earlier this year. See related article from Wisconsin Real Estate Magazine, May 2009, online at news.wra.org/story.asp?a=1116.)
Encourage Municipalities to Stay Informed of Local Foreclosures
Recommend municipalities take steps to stay appraised of their local foreclosures by obtaining foreclosure notices from their local courts, which are available to the public prior to the abandonment proceedings.
The WRA will now work with legislative leaders in the drafting and introduction of the bipartisan recommendations for legislation. For further information, contact Michael Theo at mtheo@wra.org.
Michael Theo is Vice President of Legal and Public Affairs for the WRA.
Published: 10/9/2009
