Can the lender come after you for the rest? Deficiency judgments in Iowa

Deficiency rules in Iowa, point by point

• The general rule

  After the sheriff's sale

  If the home does not sell for enough to satisfy the judgment, the lender can get a general execution against you for the rest, unless the parties agreed otherwise.

  Iowa Code § 654.6

• Foreclosure without redemption: no deficiency unless you demand a delay

  Read the first page of the petition

  If the lender elects foreclosure without redemption on your one or two family residence and does not waive a deficiency, no deficiency judgment can be entered as long as you do not file a demand for delay of sale. If you do file the demand, a deficiency can be entered. The petition must warn you of this in capital letters.

  Iowa Code §§ 654.20, 654.26

• Short redemption period means no deficiency

  When the lender uses a shortened period

  A mortgage on less than 10 acres can cut the redemption period to 6 months, or 3 months for non-farm property, but only if the lender waives any deficiency judgment in the foreclosure.

  Iowa Code § 628.26

• 2 year limit on home foreclosure judgments

  2 years after the judgment is entered

  For a one or two family home that is the borrower's residence, a foreclosure judgment becomes null and void 2 years after it is entered, not counting time it was stayed by bankruptcy or court order. All liens end, and no execution can issue after that, except as a setoff or counterclaim.

  Iowa Code § 615.1

• Voluntary foreclosure and deed in lieu

  When you sign the agreement

  Under Iowa's alternative nonjudicial voluntary foreclosure, you deed the home to the lender and the lender must waive any deficiency or other claim on the mortgage. For a deed in lieu or short sale outside that procedure, your written agreement controls, so look for a clear waiver.

  Iowa Code § 654.18

• Iowa wage garnishment caps

  Per creditor, per year

  Iowa limits garnishment by each creditor in a calendar year: $250 if you earn under $12,000, rising by income bracket to 10 percent of expected earnings for people who earn $50,000 or more.

  Iowa Code § 642.21

• If you get a deficiency claim

  Before any deadline in the papers

  Check which track the petition elected, whether you filed a demand for delay of sale, and how long ago the judgment was entered. Contact Iowa Legal Aid or Iowa Mortgage Help listed on our Iowa foreclosure help page.

The short answer in Iowa

Common questions in Iowa