RACINE COUNTY — A new state bill has gone into effect that aims to curb fraud and errors regarding foreclosed houses.
Tyson Fettes, the Racine County register of deeds, said the legislation is a “good government, commonsense bill that closed a loophole in the foreclosure process.”
Previously, Fettes said, when a property was foreclosed on either it would go back to a bank or a third party would put a down payment on the property, and it would be up to the new owner to file the paperwork with the Register of Deeds’ Office.
Now, the paperwork will go directly to the deeds office and not to the property owner until after the deeds office has recorded the change.
“Instead of the clerk of courts relinquishing control and the county relinquishing control and giving it to the (property owner) there, they’re going to send it down to us to record it right away,” Fettes said. “And then we will return it to them recorded … the reason why that’s important is so if somebody doesn’t record a deed in our office it doesn’t update the tax roll.”
Fettes said if the ownership of a particular property is not updated, then the burden of paying taxes falls to the previous owner.
“It tightens up the whole process all the way through to get the correct ownership information on the tax rolls,” Fettes said.
Fettes said it helps keep county records accurate.
Helps with fraud and accidents
There were several foreclosure issues, particularly in Milwaukee, where the loophole caused issues.
“What was happening in Milwaukee County was that a third-party buyer would buy the house at a sheriff’s sale, not record the deed, not pay the taxes and then rent the house,” Fettes said. “They would never pay the taxes on the property because the taxes were in the (previous owner’s) name.”
Fettes said there were cases of fraud found “all around the state,” but the new law should also cut down the number of accidental filing errors with new property buyers.
“There’s also accidental mix-ups where a person thought the paperwork was done in the Clerk of Courts’ Office and they didn’t realize they had to record something down here in our office,” Fettes said. “This solves all of those problems where it was an accidental mix-up or one on purpose for fraud.”