Iowa Foreclosure is judicial, meaning it is an “in court” foreclosure proceeding. when a borrower defaults on their mortgage payments in Indiana, the servicer of the loan, on behalf of the lender, will begin a foreclosure. Approximately half of all states, including Indiana, require the lender to file a lawsuit in court to foreclose. State law spells out how foreclosures work, and both federal and state laws give the borrower many rights and protections throughout the process.
In Iowa foreclosure the process can occur with or without redemption rights. it simply depends on how the lender pursues the foreclosure. Borrowers are allowed to voluntarily agree to an out-of-court foreclosure or the lender can execute an out-of-court foreclosure without agreement from the borrower.
The lender typically delivers a written Notice of Default (NOD), to the borrower 30 days before starting the foreclosure process. The notice of default to the borrower must include the amount owed and the exact date of when the amount must be paid. If the borrower does not correct the default, the lender is allowed to start the foreclosure process.
Once the pre-foreclosure period is over, the court renders judgment for the entire amount due and directs the property to be sold in order to satisfy the judgment. Usually, this sale typically occurs within two months. However, if the lender is pursuing foreclosure without redemption then the borrower can demand the sale be delayed for between 6 and 12 months.
Notice of Sale & Auction
The county sheriff handles distribution and publication of the Notice of Sale (NOS). The notice of sale must be posted in at least three public places, and one of the notices must be the county courthouse. There must also be two weekly notice publications in a local newspaper. The first notice in the paper must appear at least four weeks before the sale date. If the borrower is still occupying the property then they must also receive notice at least 20 days before the Iowa foreclosure sale.
The county sheriff is responsible for organizing and conducting the sale. Sales occur between 9:00 a.m. and 4:00 p.m. during regular business days. The county sheriff is allowed to receive sealed written bids so long as they include 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, and the process starts again.
If a lender chooses foreclosure without redemption, the winning bidder receives a deed wand the former owner has no right of redemption.
For court foreclosures with a redemption period, that period can last from 30 days to one year, depending on the situation and the court. For example, if a lender wants to pursue a deficiency judgment, borrowers have a one-year redemption period . If a lender surrenders deficiency judgment rights, the redemption period is six months.