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 when 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 to pay the delinquent amount, plus costs. If the borrower does not pay within the specified period, the court will then order the property to be sold.
Notice Of Sale Requirements
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 before the date of the sale.
Auction Open To The Public
The sale must be at a 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 before 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 delayed for more than three days, a notice of the new sale must be publicly announced when the sale was to have been made.
Non-Judicial Foreclosure Option
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 recorder’s office stating that they have chosen to proceed with the foreclosure using the voluntary foreclosure procedures.
