Iowa Laws

Both judicial and non-judicial foreclosures are allowed in Iowa. The guidelines for the use of non-judicial foreclosures are somewhat different than in most states, as the homeowner has to consent to their use as opposed to a judicial foreclosure, instead of basing their use on the presence of Powers of Sale clauses in the mortgage.

The foreclosure process begins when the lender files a Notice of Default against the homeowner with the county register. The homeowner is given thirty days to decide on either a non-judicial or a judicial foreclosure, or to pay the amount owed to the lender. If the homeowner opts for judicial foreclosure, the court will grant the homeowner extra time in which to pay off the default. If the debt still goes unpaid, the homeowner's property will be sold at public auction under the direction of the Iowa courts.

If the homeowner opts for a non-judicial foreclosure, then the lender is entitled to immediately repossess the homeowner's property and the homeowner waive all rights to redemption once a foreclosure sale concludes. Conversely, this also means that the lender loses the right to seek a deficiency judgment against the homeowner if the funds generated from the sale of the property do not satisfy the original amount of the loan provided.

Iowa foreclosure sales typically occur between two and twelve months after the court's ruling, depending on the type of judicial foreclosure granted by the court. If they decide on a foreclosure without redemption rights, the homeowner can have the sale delayed by up to a year. If the foreclosure includes redemption rights, it usually takes place within two months. Either way, the homeowner can still stop the foreclosure process by paying off the default debt owed to the lender at any time before the sale begins.

The Sheriff or lender must advertise all Iowa foreclosure sales, depending on whether it is judicial or non-judicial. A Notice of Sale must appear in three public places including the courthouse door. The Notice must also be published twice in a local weekly newspaper, the first Notice appearing four weeks before the sale and the second within a week of the sale. The homeowner is entitled to be served with a Notice of Sale at least 20 days before the sale is scheduled.

Judicial sales are conducted by the Sheriff. The auction is silent, and bids must be written and placed in sealed envelopes. At the sale the Sheriff reads off the amounts of each bid and the winning bidder receives a Certificate of Sale.

Foreclosures without redemption periods require that the winning bidder is immediately transferred ownership of the property. If redemption was granted, the homeowner may have up to one full year to provide payments of the winning bid and redeem full ownership of their property.

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