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  • WisBar News
    September 16, 2010

    Foreclosure confirmation requirements won’t save homeowner who does not answer

    Failure to answer a foreclosure action petition will foreclose a debtor's ability to challenge the home purchaser's request for judicial confirmation of the sale.

    By Joe Forward, Legal Writer, State Bar of Wisconsin

    Foreclosure   confirmation requirements   won't save homeowner who does not answer Sept. 16, 2010 – A residential property owner that fails to file an answer to a foreclosure action cannot rely on statutory confirmation requirements to invalidate judicial confirmation of a foreclosure sale, a Wisconsin Appeals Court recently held.

    In 2007, Wells Fargo Bank instituted a foreclosure action against homeowners James Biba and Lisa Clason. Neither filed an answer. The circuit court entered a default judgment of foreclosure and authorized a public sale of the property.

    After Wells Fargo acquired the property upon foreclosure sale, it requested a circuit court order confirming the sale. Wells Fargo did not notify Biba or Clason of the confirmation request. In 2009, the circuit confirmed the foreclosure sale.

    Three weeks later, Biba moved the circuit court to vacate the confirmation order on the grounds that Wis. Stat. section 846.165(1) requires a party to file a motion seeking confirmation of foreclosure sale, necessitates a confirmation hearing, and obligates a party to provide notice of the confirmation hearing to the former owner of the foreclosed property.

    Section 846.165(1) prevents confirmation of a mortgage foreclosure unless “5 days' notice has been given to all parties that have appeared in the action.” Under the statute, the notice must be given “either personally or by registered mail” to a last-known address “at least 5 days prior to the date when the motion for confirmation is to be heard.”

    In Wells Fargo Bank, N.A. v. Biba, 2009AP2273 (Sept. 16, 2010), the appeals court rejected Biba’s argument that Wells Fargo did not meet the prerequisites of section 846.165(1) and, therefore, the confirmation of foreclosure sale was invalid.

    Biba first argued that he was entitled to notice of the confirmation hearing even though he did not appear in the action. The appeals court rejected this argument, holding that the only statutory notice requirement is that “notice must be given to a party that has appeared.”

    Second, Biba argued that section 846.165(1) requires a confirmation hearing in all cases. Since a confirmation hearing was not held, Biba asserted, the confirmation order was invalid. But the appeals court explained that a hearing is only required when an appearing party is entitled to notice, and Biba was not entitled to notice because he did not appear.

    Finally, the appeals court rejected Biba’s argument that Wells Fargo requested confirmation by letter, and section 846.165(1) required Wells Fargo to file a motion for confirmation.

    The appeals court explained: “[A]s with the need for a hearing, in the absence of facts requiring a notice, the statute does not arguably impose a general requirement that a motion for confirmation be filed.” Thus, the appeals court affirmed the circuit court’s order confirming the foreclosure sale of the Biba and Clason property. 

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