846.02.Foreclosure; defendant may have assignment of mortgage.

Section 846.02 gives a foreclosure defendant a way out that leaves the mortgage alive rather than extinguished. Subsection (1) lets any defendant, upon paying the plaintiff or the plaintiff’s attorney the amount then owing for principal, together with interest and all costs up to that point, demand an assignment of the mortgage to the defendant. Once that demand and tender are made, the plaintiff must assign the mortgage to the defendant, and the plaintiff is barred from further prosecuting the foreclosure action. If a dispute arises over the amount owed for costs, the statute directs the parties to apply to the court where the action is pending to fix the costs accrued.

Subsection (2) extends the same option past judgment: if the demand and tender are made after judgment has been entered, the plaintiff, or the plaintiff’s assignee, must assign the judgment itself to the defendant rather than the mortgage.

The practical effect is that a defendant who can come up with the full amount owed does not have to let the foreclosure run its course to a sale. Paying off the debt and taking an assignment keeps the mortgage, or the judgment, in the defendant’s hands instead of the property passing through a foreclosure sale.