Legislative Alert: Foreclosure Equity Bill Signed into Law

 Joe Murray, WRA director of political and governmental affairs  |    May 02, 2022

In late March, Gov. Tony Evers signed Wis. Act 216 — the foreclosure equity bill and one of the WRA’s legislative priorities — into law. The new law requires counties to pay any net proceeds in a property tax foreclosure sale to the former owner of the property.

Passage of the new law was a matter of fairness and was important because:

  • Prior to the passage of Act 216, counties could keep any net proceeds — even after all penalties, interest and selling costs were paid — unless the property was the former owner’s homestead.
  • Wisconsin was one of only 12 states that allowed foreclosure equity theft. 
  • Foreclosure equity theft was an unconstitutional taking. Under the Fifth Amendment to the U.S. Constitution, the government is prohibited from taking property for a public purpose without just compensation.
  • Keeping the equity in an owner’s property made such financial hardships even worse and prevented the owner from making a financial recovery.

Wis. Act 216 passed both houses of the Wisconsin Legislature on unanimous votes and was signed into law on March 30, 2022.

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