Iowa Foreclosure Laws

Iowa foreclosure laws can be categorized as judicial or non-judicial/out-of-court. Non-judicial foreclosure takes place when permitted by borrower or homeowner. However, court proceedings are common. Typical foreclosure takes 4 to 6 months.

In order for the Iowa foreclosure proceedings to begin, the lender sends a written notice of default to the borrower. The notice should be sent 30 days before start of the foreclosure process. The notice contains the amount owed by the borrower and the date the debt should be paid. During the pre-foreclosure period, the borrower is given chance to pay the defaults. If borrower fails to fulfill his or her obligations to the lender, foreclosure is called for by the lender.

Iowa Judicial And Non-Judicial Foreclosure

With judicial foreclosure, the court issues a final judgment of foreclosure and the lender needs to file a petition known as lis pendens – public notice stating that there is a pending lawsuit on a distressed property. Court proceedings grants borrower fair time to pay the default amount owed to reclaim their property.

Statutory right of redemption is applicable but depends on the lender. In the case of foreclosure without redemption, lender does not allow borrower to redeem property. On the other hand, foreclosure with redemption grants the borrower 30 days to one year redemption period.

If the property is bought for less than the amount of loan, deficiency judgment is obtained. At this point, the borrower is still indebted to the lender and should pay for the difference between the property sold and the amount of the original loan. On the other hand, the lender may surrender deficiency rights. However, this will shorten the redemption period to 6 months.

Notice of Sale

The Sheriff conducts the circulation and publication of Notice of Sale. Iowa foreclosure laws state that Notice of Sale must be published in 2 weekly publications and must be posted in 2 public places, and one at the courthouse. The borrower should receive the notice at least 20 days prior to the foreclosure sale.

Iowa Foreclosure Guidelines

• The lender issues a Notice of Default to the borrower 30 days before the foreclosure starts.
• If the borrower fails to settle debt, lender files lis pendens.
• Mortgage is the Instrument of Security and requires appearance before the court.
• Typical timeline is 150 days.
• Judge issues an order of foreclosure sale if the borrower fails to pay debt.
• Notice of Sale must be published in local newspaper and posted in the county courthouse, and 2 other public places. First publication should be at least 4 weeks prior to auction.
• Sale may be postponed, however, if it last more than 3 days, a new Notice of Sale must be announced publicly during the foreclosure sale.
• Sheriff conducts foreclosure sale. Sealed, written bids and refundable fees are allowed and should be read by the Sheriff at the auction.