Iowa Foreclosure Law

• Judicial Foreclosure Available: Yes
• Non-Judicial Foreclosure Available: No
• Primary Security Instrument: Mortgage
• Timeline: Usually 150
• Right of Redemption¹: No
• Deficiency Judgments² Allowed: No

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Lenders in the state of Iowa may foreclose on a mortgage in default using the judicial foreclosure process or an alternative non-judicial foreclosure process.

Judicial Foreclosure

A judicial process of foreclosure requires that the lender file a lawsuit and attain a court order to foreclose on a particular property.

Judicial Foreclosure Procedure

Notice of the sale is posted in at least three (3) public places of the county, one of which shall be at the county courthouse. Notice is published in two (2) weekly publications, 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 (20) 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

Upon the mutual written agreement of the borrower and the lender, a mortgage in default may be foreclosed using the following procedure:

1. The borrower conveys to the lender all interest in the mortgaged property.
2. The lender accepts the borrower’s conveyance and waives any rights to a deficiency or other claim against the lender arising from the mortgage.
3. The lender gains immediate access to the property for the purposes of maintaining and protecting the property.
4. The borrower and lender file a jointly executed document with the county recorder where the property is located stating that they have elected to follow the alternative voluntary foreclosure procedure outlined in the Iowa statutes.
5. The lender sends notice via certified mail to all junior lien holders as of the date of the conveyance.
6. The junior lien holders have thirty (30) days from the date of mailing to exercise any rights of redemption.

A lender who agrees to this foreclosure procedure can not report to a credit bureau that the borrower is delinquent on the mortgage. However, the lender can report that this type of foreclosure procedure was used.

¹ A borrower’s right to reacquire property lost due to a foreclosure.
² A personal judgment against the borrower for the remaining balance on the loan after a foreclosure sale.

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