Title State, Lien State, What’s the Difference?

Wisconsin is a state which follows the lien theory of mortgages. In other words, the mortgagee does not have legal title in the mortgaged premises Section 708.01 Wis.Stats. See also, Mutual Fed. S. & L Assoc. v. Wisconsin Wire Works., 58, 58 Wis. 2d 99, 104, 205 N.W2d762 (1973). The mortgagor retains full ownership in the property, which consists of equitable and legal title, while the mortgagee’s interest is that of a lien holder. Therefore, the mortgagee’s status is that of a holder of a security interest Osborn, Mortgages, sec. 127 at 208.See also, Bank of Commerce v. Waukesha County, 89 Wis. 2d 7155, 279 N.W.2d 237 (1979).

“A foreclosure suit has been said to be merely a proceeding for the legal determination (emphasis added) of the existence of the mortgage lien. The ascertainment of its extent, and the subjection to a sale of the estate pledged for its satisfaction.” 55 Am. Jur. 2d Mortgages sec. 553 (1971).

Wisconsin Statute 706.02 Conveyance of Real Property; Recording; Titles Formal Requisites (1) Transactions under s. 706.001 shall not be valid unless evidenced by a conveyance that satisfies all of the following:
(a) Identifies the parties; and
(b) Identifies the land; and
(c) Identifies the interest conveyed, and any material term, condition, reservation, exception or contingency upon which the interest is to arise, continue or be extinguished, limited or encumbered.

Wisconsin Statute 806.07(1) On motion and upon such terms as are just, the court, subject to subs. (2) and (3), may relieve a party or legal representative from a judgment, order, or stipulation for the following reasons:

806.07(1)c Fraud, misrepresentation, or other misconduct of an adverse party.


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