When “Shall” Means “May”: Wisconsin Court of Appeals Allows Mortgage Lenders to Slow the Foreclosure Sale Process

house for sale

Last week we discussed the Wisconsin Supreme Court’s decision in Bank of New York v. Carson permitting circuit courts to force a mortgagee to hold a sheriff’s sale. Today we rewind the clock a bit to a decision last December by the Court of Appeals on a different aspect of Wisconsin’s foreclosure regime. In Bank of America, N.A. v. Prissel, 2015 WI App 10 (Dec. 9, 2014), the court held that a mortgagee is not required to publish a notice of sale before the expiration of the six-month redemption period in Wis. Stat. § 846.101. The case presents an interesting juxtaposition to the Carson case because it interprets the same word in a neighboring statute.

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When “Shall” Means “Shall”: Wisconsin Supreme Court Requires Mortgage Lenders to Sell Abandoned Properties in Foreclosure

house for sale

Last week the Wisconsin Supreme Court issued its decision in Bank of New York v. Carson, 2015 WI 15, a case we previewed here. The case is significant for its potential lasting effects on mortgage foreclosures in Wisconsin.

The Carson case involves interpretation of Wis. Stat. § 846.102, which applies to foreclosure of “abandoned” properties. In 2007, Shirley Carson granted a mortgage on her home in Milwaukee to secure a loan from Countrywide Home Loans. After Carson defaulted on the loan, Bank of New York (the trustee of the securitized mortgage trust to which Countrywide had transferred the mortgage loan) filed a foreclosure action, and the Milwaukee County Circuit Court entered a default foreclosure judgment in June 2011. Because the property appeared vacant at the time, and the bank did not seek a deficiency judgment against Carson, the judgment provided for a 3-month statutory redemption period under § 846.103(2), but the bank did not sell the property after the redemption period expired.

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Judge Posner on Bankruptcy’s "Clean-Up" Jurisdiction

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Most bankruptcy lawyers might think that the dismissal of a bankruptcy proceeding and the revesting of the bankruptcy estate’s assets in the debtor bring an end to the bankruptcy court’s jurisdiction.

Not (necessarily) so, according to the Seventh Circuit in In re Sweports, Ltd., No. 14-2423 (7th Cir. Jan. 9, 2015), a decision written by Judge Posner in which Judges Williams and Tinder joined. There exists a form of “clean-up” jurisdiction (or “ancillary” jurisdiction, as the court acknowledged “it is commonly called”) that allows a bankruptcy court “to take care of minor loose ends,” even after the case has been dismissed.

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Seventh Circuit Requires "Cash on the Barrelhead" from Interpleaders

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Judge Easterbrook and his colleagues on the U.S. Court of Appeals for the Seventh Circuit aren’t about to exercise jurisdiction over a civil action of interpleader merely on credit or promises to pay. The plaintiff has to pony up the goods.

This was the holding of the Seventh Circuit’s recent decision in State Farm Life Ins. Co. v. Jonas, No. 14-1464 (7th Cir. Dec. 31, 2014), an opinion authored by Judge Easterbrook, in which Judges Flaum and Kanne joined. Specifically, 28 U.S.C. § 1335 provides federal courts with jurisdiction over certain interpleader actions, but it requires (1) minimal diversity and (2) that “the plaintiff has deposited such money or property . . . into the registry of the court.” Without that “cash on the barrelhead,” the Seventh Circuit held that it lacked jurisdiction.

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A Reminder from the Seventh Circuit on the Importance of Creating a Record

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When the court makes an evidentiary ruling off the record, it is required to enter on the record an explanation of the reasoning behind its decision. See, e.g., United States v. Nolan, 910 F.2d 1553, 1559 (7th Cir. 1990); 28 U.S.C. § 753(b). But what is a party’s recourse on appeal if the court failed to meet this requirement and the party didn’t object at the time?

None. So explained the Seventh Circuit in United States v. Lawson, No. 14-1233 (7th Cir. Jan. 20, 2015), a case which should serve as an important reminder about preserving off-the-record rulings for appeal in civil and criminal cases alike.

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