Quick Facts

–  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.

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