How foreclosure works in Iowa

The notices you will receive in Iowa, in order

1. Notice of right to cure

   Given by the lender before it can call the loan due or file, with 30 days to respond

   This written notice must state the default, the total needed to fix it with late charges itemized, and the exact date to pay by. If you pay the missed installments within 30 days, the loan goes back to good standing. Call the number on the notice to confirm the amount, and call a counselor the same week.

   Iowa Code §§ 654.2B, 654.2D

2. Demand for the accelerated balance and the mediation notice

   Mailed by the lender or its attorney after the cure period ends

   The lender gives a 14-day demand for the full balance if it wants to claim attorney fees on that balance. With the notice of acceleration or the attorney's first letter, you must also get a notice about free counseling and mediation on a form from the Attorney General. Keep it, because you get it again with the court papers.

   Iowa Code § 654.4B

3. Original notice and petition

   Served on you when the lender files in district court, after the federal 120-day wait

   These are the court papers that start the case, usually handed to you by the sheriff. You have 20 days after service to serve an answer or motion. Look at the first page of the petition for a notice in capital letters saying the plaintiff has elected foreclosure without redemption, and whether it waives a deficiency judgment.

   Iowa Code § 654.20; Iowa R. Civ. P. 1.303

4. Notice of intent to file for default

   Mailed by the lender at least 10 days before it asks for a default, if you did not respond

   If you miss the 20 days, the lender must mail you a written notice that it plans to apply for a default. Treat this as your last warning to file a response and, in most cases, a demand to delay the sale.

   Iowa R. Civ. P. 1.972

5. Judgment and decree of foreclosure

   Entered by the judge, by default, on summary judgment, or after trial

   The decree sets the full amount due and orders the home sold. The clerk sends a copy to every party. Any demand for delay of sale has to be on file before this is entered.

   Iowa Code §§ 654.5, 654.21

6. Notice of sheriff's sale

   Served on you by the sheriff at least 20 days before the sale if you live in the home

   The sheriff must give 4 weeks' notice of the sale, post it in three public places including the courthouse, and publish it twice in a local newspaper. The notice states the time and place of the sale.

   Iowa Code §§ 626.74, 626.75, 626.78

7. Sheriff's deed or certificate of sale

   At the sale, or at the end of the redemption period

   In a foreclosure without redemption the buyer gets a deed and the right to possession immediately. In a foreclosure with redemption the buyer gets a certificate, and the sheriff's deed comes only if you do not redeem in time.

   Iowa Code §§ 654.24, 626.95, 626.98

The legal steps in Iowa

1. Missed payments and the notice of right to cure

   Federal rules generally stop your servicer from starting a foreclosure until you are more than 120 days behind. Before filing in Iowa, the lender must give you a written notice of right to cure. You then have 30 days to catch up on the missed payments, without paying the whole loan, and the lender cannot call the full balance due during that time.

   12 C.F.R. § 1024.41(f); Iowa Code §§ 654.2B, 654.2D

2. Counseling and mediation notice

   Before filing against an owner-occupied one or two family home, the lender must send you a notice about free counseling and mediation, and must serve it again with the court papers. If you did not get it and want counseling or mediation, you can ask the court to delay the sheriff's sale for up to 60 days.

   Iowa Code § 654.4B(2)

3. The lender files a petition in district court

   You are served with an original notice and petition, usually by the sheriff. You have 20 days after service to serve a written answer or motion. Look at the first page: if the lender has elected foreclosure without redemption, a notice in capital letters must say so.

   Iowa Code § 654.20; Iowa R. Civ. P. 1.303

4. File a demand to delay the sale

   If the lender elected foreclosure without redemption, you can file a written demand for delay of sale at any time before judgment. For your one or two family home, this delays the sale until 6 months after judgment, or 3 months if the petition waives a deficiency judgment. Be careful: if the lender did not waive a deficiency, filing the demand lets the lender seek one, so get legal advice first.

   Iowa Code §§ 654.20, 654.21, 654.26

5. Judgment

   The court decides how much is owed and orders the home sold. Until the sale you can still stop it by paying the full amount of the judgment.

   Iowa Code §§ 654.5, 654.21

6. Sheriff's sale

   The sheriff must give 4 weeks' notice of the sale, post it in three public places, and publish it twice in a local newspaper. If you live in the home, the sheriff must also serve you with written notice at least 20 days before the sale. The sale is a public auction, and you are allowed to bid.

   Iowa Code §§ 626.74, 626.75, 626.78, 626.80, 654.23

7. After the sale

   In a foreclosure without redemption, the buyer gets a deed and the right to possession immediately, and you cannot buy the home back. In a foreclosure with redemption, you can stay in the home during the redemption period and get it back by paying the sale price plus interest and costs to the clerk of court.

   Iowa Code §§ 654.23, 654.24, 628.3, 628.13

Common questions in Iowa