Janesville72.5°

Rock County foreclosure rate ranks high

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Ryan Dostalek
August 11, 2008
— Janesville resident Margie Krause dodged a financial bullet.

Her mortgage company told her in November 2007 that she had defaulted on her mortgage and planned to foreclose on the Janesville home she’d owned for 30 years.


“I was not giving it up,” Krause said of her house at 710 Edison Ave.


Krause is not alone.


Hers was among 801 foreclosures filed in Rock County Court in 2007, which had the most foreclosure filings since at least the 1990s, according to a Janesville Gazette review of court records.


The first seven months of 2008 had 512 foreclosures, a 29.6 percent increase over the first seven months of 2007. It was the largest seven-month increase for the county in five years.


One in every 91 Rock County homes had a foreclosure action filed against it in 2007, the fifth-highest rate in the state.


Krause and her husband built their home in 1978. They divorced shortly after building, but Krause managed to get by.


“I held onto the house as a single woman for 22 years,” she said. “I put two kids through college, and I never missed a payment.”


Krause moved to Las Vegas for a year in 2005 to help take care of her grandchildren. Her 28-year-old daughter, Stacy, and Stacy’s boyfriend stayed behind to take care of the house and help with mortgage payments.


That’s when the problems began.


Stacy’s boyfriend left in June 2007, and didn’t help make the June payment, which the three were splitting. Krause made the full payment on time, despite not having his help, she said.


But after six weeks, Krause’s check hadn’t cleared the bank. Confused, she called the mortgage company and was told the company wouldn’t accept partial payment and that she owed double what the check was written for.


By the time Krause could get a new check to the mortgage company, she was three months delinquent. The company started foreclosure.


“I was just frustrated and disappointed,” she said. “But I kept thinking positive the whole time.


“If it was meant to be, it was meant to be. It was in God’s hands.”


Andy Lewis, community development specialist and professor at the Center for Community and Economic Development at the UW-Extension, said foreclosures have not yet peaked in Wisconsin.


“We’re not seeing the spikes or large increases in Rock County, but (the county) has a large number of foreclosures,” Lewis said.


Recent flooding, coupled with continued layoffs and the impending closure of the General Motors plant in Janesville are going to have an effect on foreclosure rates for the county, Lewis said.


Nationwide, foreclosure rates are up 53 percent since June 2007, despite a 3 percent drop in foreclosed homes from May to June of this year, according to RealtyTrac, the commercial watchdog keeping tabs on foreclosure rates.


Last stop

A foreclosure filing doesn’t mean the home was foreclosed, Lewis said.


For that to happen, the home must pass through the hands of Sgt. John Cowan of the Rock County Sheriff’s Office.


Cowan and a half-dozen people—mostly attorneys—gather at 10 a.m. each Wednesday in the lobby of the Rock County Courthouse. He pulls out a handful small brown envelopes, each containing information about a property and a bid from the bank holding the mortgage. He reads the terms of the sale.


Ten percent of the sale price must be paid at the time of the sale, and the remaining amount is due within 10 days, he tells them.


“If you don’t have the cash, don’t bid,” he repeats each time.


He reads the bank’s bid and asks if there are any other bidders. Typically, there are none.


“I’d say 90 to 95 percent of the homes go back to the plaintiff,” he said.


The number of Rock County homes actually sold at foreclosure auction totaled 388 in 2007, less than half the number filed, according to department records. The rest were cancelled, adjourned or postponed.


Through the end of July this year, Cowan had sold 252 homes on the auction block.


Close call

Krause won’t be in the sheriff office statistics.


When the foreclosure process started and Krause realized she might lose her home, she contacted a friend, who posted her home on the Multiple Listings Service. Within a few days, she had four offers. Krause took the one that would get her the money quickest.


Her house was scheduled to be auctioned Aug. 6, but just hours before the sale her realtor and the buyer’s realtor completed the necessary paperwork and called to cancel the auction.


In the end, the ordeal worked out for Krause.


She was able to avoid foreclosure, which would have decimated her credit rating, already marked by medical bills from a coma-inducing car accident in 1991.


“Something’s better than nothing,” she said. “I don’t feel like I lost (the home), now.”


THE FORECLOSURE PROCESS

The foreclosure process varies state-to-state, but here’s the process in Wisconsin, according to Foreclosure Wisconsin:


-- A lender sends a letter to the homeowner when the borrower is late on a payment.


-- If the bank feels it will continue losing money, it files a fair debt collections letter with the borrower commanding payment. The attorney for the bank then files a complaint with the court system, which in turn is served to the borrower, notifying them of the legal action of the bank to repossess the home.


-- The bank’s attorney files a document with the court to show the legal action pending on the home.


-- After 20 days, the property enters the monetary judgment phase of the foreclosure process. A judge hears the case and makes an order for repayment. After the court order, the property is scheduled for auction.


-- The sheriff’s office publishes the auction time in local newspapers and at three locations in the township where the home is located.


-- The sheriff’s office sells the foreclosed property at auction.


-- Property heads back to court for a sale-confirmation hearing.



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