Iowa Foreclosure Laws
Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: No
Security Instruments: Mortgage
Right of Redemption Period: Varies
Deficiency Judgments Allowed:
Time Frame: 150 Days
Public Notice: Petition
Iowa is considered to be a lien theory state, which means that property acts as security for a borrower’s loan. In the state, the document that places the lien on a property is called a mortgage. If a lender defaults on their loan, their property may be foreclosed. However, only judicial foreclosures are allowed in the state.
In Iowa, the right of redemption period, or the time frame a borrower has to reclaim the property by satisfying the default in full, varies. Borrowers may have between one (1) month to one (1) year to reclaim their property, depending on their circumstances and the foreclosure sale.
Lenders in the state have a right to a deficiency judgment in the event that the foreclosed property is sold at auction for less than the amount that is owed on it. If pursued, the borrower will be responsible for paying the difference between the default and the amount the foreclosed property was sold for.
Types of Foreclosures Allowed in Iowa
Iowa statute allows for judicial foreclosures on defaulted property. This type of foreclosure, also known as foreclosure by judicial sale, involves selling the defaulted property under court supervision. In order for a judicial foreclosure to be possible, no power of sale clause may be present in the loan documents.
To start the process, the lender must file a lawsuit against the borrower along with a Lis Pendens, which is a recorded document that provides public notice that the property is being foreclosed, to obtain a Decree of Sale. The borrower will then be allowed a period of time to pay the default before the property is sold at auction.
In Iowa, a Notice of Sale is required to be posted at a minimum of three public places in the county where the property is located. A copy of the notice must also be posted at the county courthouse where the property is located and another copy must be printed in a newspaper that is circulated in the same county where the property is located. The first publication must be printed a minimum of four (4) weeks before the scheduled foreclosure sale. A minimum of two (2) publications are required.
The borrower’s copy of the foreclosure notice must be served a minimum of twenty (20) days before the scheduled sale.
Sales must be conducted at a public auction and held by the county sheriff between 9 a.m. and 4 p.m. Those who wish to bid on the property must do so with sealed bids that are submitted before the start of the sale. The sealed bid must include payment for the property along with any miscellaneous fees.
During the sale, the sheriff will open the bids and read them publicly. Bids that are rejected are returned along with the payment to the person who placed the bid.
The sale may be postponed for a maximum of three (3) days at the originally scheduled time of sale.
A borrower may be able to avoid foreclosure by voluntarily waving all rights to the property with a Disclosure of Notice and Cancellation, stating that they are voluntarily giving up their right to reclaim the property. A joint statement must be filed between the borrower and the lender. By accepting this offer, the lender waves their right to a deficiency judgment.
Working with a Foreclosure Lawyer in Iowa
Although the thought of losing your home is a frightening one, there is help available for all mortgagors in Iowa who have fallen behind on their payments or who have already been issued a foreclosure notice. Homeowners can fight for their properties with the help of a top team of foreclosure lawyers.
Foreclosure attorneys work hard to ensure that the homeowner’s property is not repossessed. A foreclosure lawyer will analyze a homeowner’s financial situation to determine a plan, such as mortgage modification, refinancing or even a temporary halt in payments, to present to the lender. Since the process of foreclosing a property costs lenders money, if an adequate plan is proposed, the lender will most likely agree to it.
Homeowners in Iowa have a right to fight for their properties, regardless of why they are in default. If you are in danger of losing our home, contact a foreclosure attorney in Iowa right away to get started on your case.