Wisconsin Mortgage

The Wisconsin Mortgage

Creditors are struggling to comply with the new Wisconsin Mortgage Satisfaction Act. Wisconsin enacted the Mortgage Satisfaction Act (2013 Wis. Act 66) in December 2013. While there are some significant changes, the new Act is based on the Uniform Mortgage Residential Satisfaction Act. Draft Single Act was drawn up to meet the challenge posed by the evolution of the housing loans aftermarket[ 1].

Since these home loans are either for sale or the service privileges are assigned, there may be a challenge in getting disbursement orders and the final settlement of mortgage payments after repayment of a mortgage. Accordingly, the Uniform Law contains provisions on the granting and answering of disbursement applications, the dependence on disbursement instructions and the settlement of mortgage claims, also by means of a "declaration of satisfaction".

" It is important to note that the Uniform Act is only applicable to the settlement of mortgage loans backed by housing. The Wisconsin Act, however, is not restricted to private mortgage loans (except in relation to settlement declarations). Compliance with the Act in the economic environment has been challenging for some creditors, particularly as creditors seek to comply with the very particular legal requirement of a "repayment declaration".

In many cases, a mortgage may be secured other than or in conjunction with a fixed-term mortgage so that a borrower cannot always "provide the information reasonably necessary to determine the repayment amount from the desired repayment date". "For example, mortgage-backed securities are: revolving credits, floating-rate credits deferred between the repayment date and the repayment date, non-drawn documentary credits expiring after the repayment date, advance payment indemnity liabilities, interest swaps and business cedes.

If the face amount can vary, or if an amount of compensation, exchange cancellation or other amount is calculated without using a formulation, a creditor today cannot tell you everything you need to know to compute the payout amount for a prospective date, and therefore cannot conform to the Act.

Some private mortgage loans face similar problems (e.g. home equity facilities). Therefore, the Uniform Law provides that the repayment amount may be changed if it "provides adequate information to require an update repayment amount... during the ordinary working time of the assured lender on the repayment date or the immediately previous working day".

"for unclear reason, the Wisconsin Act has removed this clause. When confronted with some of the above mentioned issues, how should a creditor meet the balance of payments requirement under the law? In the event that any part of the amount to be repaid cannot be established at the date the certificate of redemption is drawn up, we advise the creditor to explain in as much detail as possible how indefinite parts of the amount to be repaid will be computed, when the computation will be finalised and how and when the definitive amount to be repaid will be available at the date of redemption.

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