Iowa Foreclosure Laws

Expected Timeline: Five to six months
Security Instrument: Mortgage
Type of Process: Most often judicial. Lenders may use nonjudicial if homeowners agree to give up possession of property and lender agrees not to pursue deficiency judgment.
Protections for Servicemembers: Iowa Code § 29A.102
Time to Respond: Homeowners must be mailed notice of default and right to cure at least 30 days before foreclosure lawsuit is filed. Notice must be published and posted four weeks before filing.
Reinstatement Period: Allowed within 30 days of homeowners receiving notice of default.
Protections for High-Cost Mortgages: None.
Redemption Period: One year after sheriff sale.
Eviction Process: New owner must file forcible entry and detainer lawsuit in order to evict. Hearing will be held within seven days, but former owner must be personally served with notice not less than three days before hearing.
Deficiency Judgments: Allowed.
Limits on Deficiency Judgments: Deficiency not allowed if nonjudicial foreclosure process is used. Otherwise, deficiencies may be limited by statute.
Cash Exempted in Bankruptcy: $100 for single person, $200 for married couple.
State Statutes: Iowa Code § 654.1 to 654.26

There is no Non-Judicial Foreclosure process in Iowa . Foreclosures are handled through the court system and no power of sale clause is included in the original loan documents.

The lender must file a complaint against the borrower in court and obtain an order to obtain a decree of sale. The court gives the borrower a period of time before the sale to cure the default on the loan. If the default is not satisfied, the property will be ordered to be sold.

The notice of sale must be posted in the county in which the property is located in at least three public spaces. One of these spaces must be at the courthouse. Also, the notice must be published in a local newspaper in the county for two weeks. The first publication must be at least four (4) weeks before the scheduled sale date.

If the borrower is still retaining possession of the property, he must be served with a copy of the notice of sale no less than twenty (20) days before the sale date.

The county sheriff conducts the sale of the property between 9:00 am and 4:00 pm . Sealed bids are submitted to the sheriff before the auction begins, along with necessary fees and the requested payment. When the property is auctioned, the sheriff opens the sealed bids and reads them aloud. Bids that are too low or are unsuccessful will be returned to the bidder.

Iowa allows the sale to be postponed, but if it is postponed for further than three (3) days beyond the original sale date, the new sale date must be announced.

Borrowers may be able to avoid the foreclosure lawsuit by voluntarily giving the lender all rights to the property along with a Disclosure of Notice and Cancellation. By this, the borrower gives up the right to occupy or reclaim the property, and rights convey to the lender. Both the lender and borrower must file a joint statement with the county recorder, stating they have chosen this method to resolve the defaulted loan. If the lender accepts this method, there is no right to sue for a deficiency judgment.

State Website: www.legis.state.ia.us