Iowa Foreclosure Laws: Process, Timeline and Your Rights

Mainly judicial. A mortgage or deed of trust may be foreclosed only by a court action in equity, except for an alternative nonjudicial voluntary procedure. Iowa also has a nonjudicial foreclosure procedure that a lender may start by serving a notice, but the borrower can stop it by filing and serving a written rejection within 30 days.

Before foreclosing on a homestead, the lender must give the borrower a written notice of right to cure, and cannot accelerate the loan or enforce it until 30 days after that notice. Before suing on the accelerated balance, the lender must also give a 14-day demand for payment to qualify for attorney fees. For a one- or two-family home that is the owner's residence, the lender must inform the owner about available counseling and mediation on a form prescribed by the Attorney General, mailed with the first communication from the lender's attorney and served again with the foreclosure petition. If this notice was not served and the owner wants counseling or mediation, the court must delay the sheriff's sale (or recording of the sheriff's deed) by up to 60 days.

The lender must wait 30 days after giving a proper notice of right to cure before accelerating or enforcing the loan. In a court foreclosure where the lender elects foreclosure without redemption on non-farm property, the sale happens promptly after judgment unless the owner files a written demand to delay; for an owner-occupied one- or two-family home, a demand delays the sale until six months after judgment (three months if the lender waived a deficiency judgment).

Yes. For a one- or two-family dwelling that is the borrower's residence (with a non-individual lender), the borrower has 30 days after the lender gives the notice of right to cure to cure the default by paying the unpaid installments then due without acceleration (or the amount stated in the notice, whichever is less) or by performing whatever else the notice requires. Curing restores the borrower's rights under the loan. The right is not available if the lender gave a proper cure notice for a prior default within the previous 365 days.

After a sheriff's sale, the debtor may generally redeem within one year from the day of sale and may keep possession in the meantime; the first six months are exclusive to the debtor. The mortgage may shorten this to six months (or three months for non-farm property) on tracts under ten acres if the lender waives any deficiency judgment, or to 60 days if the court finds the property abandoned and the lender waives a deficiency. If the lender elects foreclosure without redemption on non-farm property, there is no redemption after the sale.

Possible, with limits. If the sale does not cover the judgment, a general execution may issue against the borrower unless the parties agreed otherwise. For a one- or two-family dwelling that is the borrower's residence (or farm property), the foreclosure judgment becomes void and cannot be enforced after two years from entry. Shortened redemption periods and foreclosure without redemption on a home (when the owner does not demand a delay) come with a waiver of deficiency.

Yes, through Iowa Mortgage Help (IMH), a state-sponsored program of the Iowa Finance Authority with the Attorney General's Office and Iowa Legal Aid. IMH runs a statewide referral hotline and offers foreclosure intervention, negotiation and mediation with loan servicers and lenders, plus free legal help through Iowa Legal Aid. By law, lenders foreclosing on an owner-occupied one- or two-family home must notify the owner that counseling and mediation are available.

Yes, for condominiums. Unpaid common expenses on a condominium apartment are a lien that is prior to other liens except tax liens and amounts unpaid on a recorded first mortgage, and the council of co-owners may foreclose it by suit like a mortgage. In a foreclosure, the owner must pay reasonable rent for the unit.

Yes. A person transferring real property (or the agent) must deliver a written disclosure statement to the prospective buyer before the seller makes or accepts a written offer. Required contents are set out in Iowa Code chapter 558A; some transfers are exempt.

Iowa sells tax certificates. A parcel sold at a tax sale may be redeemed any time before the right of redemption expires by paying the county treasurer the sale amount, the certificate fee, and interest of 2% per month (each fraction counted as a full month), plus later taxes paid by the buyer with interest. The certificate holder can start the process to end redemption by serving a notice after one year and nine months from a regular sale (shorter periods apply to certain special sales). The law in effect at the time of the tax sale governs redemption.

Iowa Mortgage Help hotline: 877-622-4866. Hotline staff take basic information and refer the case to a local certified counseling agency; counseling is free, and free legal help is available through Iowa Legal Aid. Questions about the program can go to the Iowa Finance Authority at 800-432-7230.