Attorney General’s Office
1305 E. Walnut Street
Des Moines, IA 50319
Tel: (515)281-5164
Fax: (515)281-4209
www.iowa.gov/government/ag/
Type of Document: Mortgage
Types of Foreclosure:
Non judicial voluntary foreclosure: If both the lender and borrower
are in agreement, a voluntary foreclosure is the most simple. The
borrower deeds the property to the lender. Upon receipt of the deed
the lender waives the right to sue for a deficiency judgment.
Judicial Foreclosure: The lender may file two types of judicial
foreclosure; with redemption and without redemption. If a lender
chooses to foreclose without the right of redemption, and is
successful, neither the borrower nor junior lien holders will be able
to redeem the property. Once the lender has filed this type of
foreclosure, the borrower may issue a written demand to the court to
delay the sale. This delays the sale from between two and twelve
months, depending on the type of property involved.
Deficiency: A deficiency can be obtained by the lender if the
foreclosure sale was delayed by the borrower issuing a written
demand.
Redemption: Redemption is available to the borrower if foreclosure
occurs with the right of redemption. Oddities of the state. As in
many of the agricultural states, laws differ for the farmer. Foreclosure
takes much longer and the lender can be forced to rent the property
back to the farmer for five years. At the end of five years the farmer
still has the right to repurchase the property from the lender. A
foreclosure may be stalled by moratorium due to bad weather or crop
failure. The delay is up to one year.
The right to cure: Iowa is very big on allowing someone a chance to
save their property. The first procedure is an institutional lender must
send the borrower a list of their right to cure. Included in the list is
one year to make up the back payments. Interestingly, if a seller
carried back a mortgage, no right to cure notice has to be given.
