Bank Can't Foreclose on Forged Mortgage, WI Court Holds

Wisconsin case law summary by Attorney Richard Clem: mortgage, forgery.

Belcorp Financial Services, Inc., v. Estate of Richard B. Wetzel and Ruth I. Wetzel. WI mortgage, forgery

This was a mortgage foreclosure action in Vilas County, Wisconsin. Unfortunately for the foreclosing bank, the homeowners had never signed the mortgage documents. They brought this up during the discovery process, and obtained the report of a forensic document examiner. Instead, the mortgage documents had apparently been signed by the homeowners' son, who had used the proceeds to finance a business loan.

The Vilas County Circuit Court, Judge Neal A. Nielsen, III, granted the homeowners' motion for summary judgment, and also awarded them $5000 in attorney fees. Dissatisfied with this turn of events, the bank brought the case to the Wisconsin Court of Appeals.

The bank first argued that, even though the son had probably signed the papers, he was actually acting as agent for his parents. The court quickly dismissed this argument, since the documents made no mention of this alleged agency. Instead, the court used the word "forged" to describe what had happened.

The bank next argued that during the course of the foreclosure, the homeowners had signed a forbearance agreement. The bank pointed out that this document waived defenses under their personal guaranty. But the court pointed out that the guaranty, like all of the other documents, was invalid in the first place, since it was a forgery.

Finally, at the very least, the bank argued that it shouldn't be liable for the attorney fees, since its case was not frivolous. But the Court of Appeals disagreed, and held that the whole case was nothing more than an attempt to legitimize forged signatures.

The homeowners also asked for their costs and fees on appeal, since they alleged that the appeal itself was frivolous. But the court denied this request, holding that it should have been made as a separate motion, rather than in their brief.

The Court of Appeals' decision in this case is an unpublished decision.

No. 2013AP662 (Wis. Ct. App. April 15, 2014).

Please see the original opinion for the court's exact language.


Richard P. Clem is an attorney and continuing legal education (CLE) provider in Minnesota. He has been in private practice in the Twin Cities for 25 years. He has a J.D., cum laude, from Hamline University School of Law in St. Paul and a B.A. in History from the University of Minnesota. His reported cases include: Asociacion Nacional de Pescadores a Pequena Escala o Artesanales de Colombia v. Dow Quimica de Colombia, 988 F.2d 559, rehearing denied, 5 F.3d 530 (5th Cir. 1993), cert. denied, 510 U.S. 1041 (1994); LaMott v. Apple Valley Health Care Center, 465 N.W.2d 585 (Minn. Ct. App. 1991); Abo el Ela v. State, 468 N.W.2d 580 (Minn. Ct. App. 1991).

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