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.