What happens after a foreclosure sale in Iowa

What happens after the sale in Iowa, in order

1. Deed and possession without redemption

   Immediately after the sale

   The buyer is entitled to an immediate deed and immediate possession, and neither you nor junior lienholders can redeem. Iowa Legal Aid says many foreclosure orders already include the order needed to remove you, so no further court action may be required. Plan to be out by the sale date.

   Iowa Code §§ 654.23, 654.24

2. Redemption period with redemption

   1 year after the sale, or 3 months, 60 days, or less in the cases the law lists

   You are entitled to possession during the redemption period, and for the first part of it only you can redeem. To redeem, pay the clerk of court the amount on the certificate of sale with interest and costs. A redeemed home is free of any unpaid part of the judgment.

   Iowa Code §§ 628.3, 628.13, 628.26 to 628.28

3. Removal from the home

   After the sale without redemption, or after the redemption period ends

   Iowa Legal Aid explains that you can be removed only by court order. Often the foreclosure decree itself contains that order. In other cases the buyer has to file a separate eviction action, and written notices must be given first.

4. Deficiency judgment

   Collection is generally limited to 2 years after the judgment was entered

   No deficiency can be entered if the lender elected foreclosure without redemption on your one or two family home and you did not demand a delay, or if the lender waived it. Where a deficiency is allowed, a foreclosure judgment on a one or two family home that is the borrower's residence becomes void after 2 years, not counting time when collection was stayed.

   Iowa Code §§ 654.6, 654.26, 615.1

5. Surplus money

   After the sale proceeds are applied

   If the home sold for more than the mortgage debt and costs and there is no other lien, the overplus must be paid to you. If other lienholders make a claim, the sheriff pays the money to the clerk of the district court and the court decides who gets it.

   Iowa Code §§ 654.7, 626.82

6. Rescission by the lender

   Any time before the sheriff's deed is recorded

   The lender can cancel its own foreclosure by filing a notice of rescission with the clerk. The mortgage then goes back to its original terms as if the case had not been filed. This is the lender's choice, not a right you can demand, but it is how a late workout can be put in place.

   Iowa Code § 654.17

The three questions that matter after a sale

Common questions in Iowa