A bank client found itself as an unsecured creditor in a Chapter 13 bankruptcy proceeding after omitting a portion of the legal description in mortgage documents.
We reviewed the documents to determine whether this error could be corrected. Wisconsin law does not require an exact legal description to perfect a mortgage. The mortgage is only required to reasonably describe the property so that the document can be properly recorded and indexed.
This mortgage was missing part of the legal description but contained the tax parcel identification number for the missing property. The document had been accepted for recording and indexed against the missing property based on the parcel identification number.
The result was secured claim status for the bank on a matter it had already charged off and assumed it would never recover.