Evidences of Indebtedness Secured by a Mortgage or Deed of Trust, Mortgage Notes, or Secured Debt

​​​​​​​​​​​​Statute: Wis. Stat. s. 551.202(11)

Used for: Transaction in a note or other evidence of indebtedness secured by a mortgage or deed of trust or by an agreement for the sale of real estate or chattels

Note: The entire mortgage, deed of trust or agreement, together with all of the evidences of indebtedness secured thereby, must be offered and sold as a unit (not fractionalized.) For instance, a $100,000 first mortgage on a property cannot be used to secure two separate $50,000 notes to different persons and qualify for use of the exemption.

Filing requirement: Self-executing. No filing or Consent to Service of Process is necessary to claim this exemption.

Frequently asked questions:

Q: Can advertising (such as a newspaper ad) be used?

A: No. The exemption does not permit any general solicitation or general advertisement.

Important interpretive letters:

July 14, 1989 letter re: Creative Mortgages & Credit Services, Inc. The language "as a unit" means that each separate and distinct mortgage (whether it is a first, second, third, etc.) cannot cover more than one separate mortgage note. For example, a first mortgage on a $100,000 piece of real estate cannot serve as collateral for five separate $20,000 notes and still qualify for this exemption. Stated another way, in order to use this exemption, a single mortgage cannot be "fractionalized" to cover multiple evidences of debt/notes, etc.

History: Predecessor statute Wis. Stat. s. 551.23(5) adopted January 1, 1970. Identical to Uniform Securities Act of 1956 s. 402(b)(5). Repealed and recreated effective January 1, 2009.

Contac​​t Us

Phone: (608) 266-2139

Email: DFISecurities@dfi.wisconsin.gov​