- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: No
- Primary Security Instrument: Mortgage
- Timeline: Typically 150
- Right of Redemption: No
- Deficiency Judgments Allowed: No
In Iowa, lenders may foreclose on a mortgage in
default using either the judicial or the alternative non-judicial
foreclosure process.
Judicial Foreclosure
The judicial foreclosure process is one in which
the lender must file a complaint against the borrower and obtain a
decree of sale from a court having jurisdiction in the county where
the property is located before foreclosure proceedings can begin.
Generally, if the court finds the borrower in default, they will
give them a set period of time to pay the delinquent amount, plus
costs. If the borrower does not pay within the set period of time,
the court will then order the property to be sold.
Notice of the sale must be posted in at least
three public places of the county, one of which shall be at the
county courthouse. In addition, there shall be two weekly
publications of such notice in some newspaper printed in the county,
with the first publication being at least four weeks before the date
of sale, and the second at a later time before the date of sale. If
the borrower is in actual occupation and possession of the property,
the notice must be served on them at least twenty days prior to the
date of the sale.
The sale must be at public auction, between 9:00
am and 4:00 pm and the time must be stated clearly in the notice of
sale. The sheriff shall receive and give a receipt for a sealed
written bid submitted prior to the public auction. The sheriff may
require all sealed written bids to be accompanied by payment of any
fees required to be paid at the public auction by the purchaser, to
be returned if the person submitting the sealed written bid is not
the purchaser. The sheriff must keep all written bids sealed until
the commencement of the public auction, at which time the sheriff
will open and announce the written bids as though made in person.
The sale may be postponed, but if it postponed for
more than three days, notice of the new sale must be publicly
announced at the time the sale was to have been made.
Alternative non-judicial
foreclosure procedure
Borrowers in Iowa have the option of avoiding a
foreclosure suit by voluntarily conveying all of their rights in the
property secured by the mortgage to the lender. If the lender
accepts the conveyance from the borrower, they are given immediate
access to the property. However, they must waive any rights to file
for a deficiency judgment against the borrower.
Additionally, the borrower is required to sign a
"disclosure of notice and cancellation", which states, among other
things, that they are voluntarily giving up their rights to reclaim
or occupy the property. The borrower and lender must also file a
jointly executed document with the county recorders office stating
that they have chosen to proceed with the foreclosure using the
voluntary foreclosure procedures.
More
information on Iowa foreclosure laws.
