Bill Would Give Banks A Year To Sell Abandoned Homes

A bill pending in the state Legislature would nullify a recent state Supreme Court ruling that requires home lenders to quickly sell abandoned houses that have been foreclosed on.

State Rep. Terry Katsma, R-Oostburg, the bill’s sponsor and a former bank president, said his goal is to speed up the sale of the vast majority of foreclosed homes by setting a one-year time limit for the owner to sell. He said abandoned homes are only a minority of the foreclosures in Wisconsin and the current five-week limit for selling them is unfair to lenders.

“(In practicality, that’s not happening) and in practicality, it’s not reasonable to expect an institution to liquidate the property that quickly,” said Katsma.

Opponents said the legislation could increase the number of empty houses in inner city Milwaukee that attract vandals and drug dealers.

Legal Action of Wisconsin attorney April Hartman, who argued the state Supreme Court case that set the five-week limit, said the proposed bill would allow lenders to leave 300 abandoned houses on the market in Milwaukee for as long as a year.

“By that time, the property will often have deteriorated to the point where nobody would want to buy it. (The property is never brought to sale and) it just becomes a menace in the neighborhood. You know it attracts drugs, fire, crime,” said Hartman.

In February, the court upheld a state law requiring lenders to sell abandoned houses within five weeks of a foreclosure.