- 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.
