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Iowa Foreclosure Law
Foreclosures in Iowa are handled both in court and out of
court. A typical Iowa foreclosure takes 4-6 months.
Pre-foreclosure Period
In Iowa, court foreclosures may occur with or without
redemption rights, depending on how the lender pursues the
foreclosure. Borrowers can agree voluntarily to an out-of-court
foreclosure or the lender can execute an out-of-court
foreclosure without agreement from the borrower. The lender
usually delivers a written notice of default to the borrower 30
days before starting the foreclosure process. The notice of
default to the borrower includes the amount owed and the exact
date of when the amount must be paid. If the borrower does not
rectify the default, the lender may start the foreclosure
process. Once any pre-foreclosure period is over, the court
renders judgment for the entire amount due and directs the
property to be sold to satisfy the judgment. Although this sale
typically occurs within two months, if the lender is pursuing
foreclosure without redemption, the borrower can demand the sale
be delayed for 6-12 months.
Notice of Sale / Auction
The sheriff handles the distribution and publication of the
notice. The notice of sale must be posted in at least three
public places, and one of the notices must be posted at the
courthouse. Additionally, there must be two weekly notice
publications in a local newspaper, and the first notice must
appear at least four weeks before the sale date. The borrower,
if still occupying the property, must also receive notice at
least 20 days before the sale. The sheriff organizes and
conducts the sale, which occurs between 9:00 a.m. and 4:00 p.m.
The sheriff may receive sealed written bids, along with a
refundable payment. At the auction, the sheriff opens and reads
the written bids. If the sale is postponed for more than three
days, a new notice must be publicly announced. If a lender
chooses foreclosure without redemption, the winning bidder
receives a deed without redemption. For court foreclosures with
a redemption period, that period can last from 30 days to one
year, depending on the situation. Borrowers have a one-year
redemption period if a lender wants to pursue a deficiency
judgment. If a lender surrenders deficiency rights, the
redemption period is six months.
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