Foreclosure in Iowa


Facing foreclosure in Iowa? Learn about the laws, procedures, and how Henkels & Baker PC can help you find the right solution for your situation. Call us.

Navigating Foreclosure in Iowa: Your Guide to Laws, Procedures, and Solutions

For many homeowners facing financial difficulties, foreclosure can be an overwhelming and distressing experience. But what does it mean when a lender forecloses, and what can you do to save your property?

Iowa has a consistently high number of foreclosures. In the third quarter of 2023, it ranked 15th in the United States for foreclosure filings. Understanding Iowa state foreclosure laws and the foreclosure process is crucial for navigating this complex situation.

If you are facing foreclosure, consider getting proper legal support and guidance. At Henkels & Baker, PC, we have over 50 years of experience helping our clients regain control of their finances. If you are struggling with your mortgage payments or facing foreclosure, speak with our foreclosure attorney today for a free case evaluation.

Understanding Foreclosure in Iowa

What Is Foreclosure?

A mortgage is a loan you take to buy real estate property and use the property itself as collateral. In the event of delinquent mortgage payments, the lender can repossess the property in a process known as foreclosure.

Under federal law, your mortgage payments must have been late for 120 days before any foreclosure action can be taken. In other words, a single missed mortgage payment is not enough to warrant a foreclosure notice or action. 

If you’ve been in default for 120 days, Iowa foreclosure laws require lenders to send you a notice of default at least 30 days before a foreclosure action.

The notice is an opportunity to cure the default. It must include the itemized owed amount and the payment deadline.

Iowa Foreclosure Process

Foreclosure laws in Iowa are designed to protect both lenders and borrowers. Foreclosure allows a lender to recover their losses by selling the property in the event the borrower defaults. However, the law also provides borrowers with tools to protect their interests in the event of a foreclosure.

Iowa foreclosures are either judicial or nonjudicial. In general, the following procedures will occur during an Iowa foreclosure:

  • Notice of default: The mortgage lender is required to issue a notice of default to the borrower at least 30 days before filing a foreclosure action. This notice must detail the default and inform the borrower of the lender’s intent to foreclose. The borrower can avoid foreclosure by making the missing payments within those 30 days. This is known as curing the default.
  • Nonjudicial foreclosure: The alternative nonjudicial voluntary foreclosure procedure is outlined in Iowa Code § 654.18. While nonjudicial foreclosures are not common in Iowa, they are possible if the property is non-agricultural and not an occupied family dwelling. If the borrower and lender agree, they can proceed with nonjudicial foreclosure. The borrower voluntarily gives up the property and the right to redemption, and the lender gives up the right to sue for deficiency.
  • Judicial foreclosure: A judicial foreclosure is a civil action. If the property owner fails to cure the default, the lender can file a foreclosure lawsuit. The court will oversee the foreclosure proceeding, and the borrower can defend against the foreclosure. If the lender wins, the property will be sold at a public auction.

What are the legal requirements for foreclosure in Iowa?

In Iowa, foreclosure is primarily a judicial process, meaning that it involves the court system. The mortgage holder must file suit in court to start foreclosure. This process is initiated when a homeowner defaults on their loan amount, as stipulated in the mortgage contract.

During the litigation process, homeowners have options like filing bankruptcy to delay the sale or making the loan current under certain circumstances. Foreclosure typically apply to properties up to a two-family dweling. The process culminates in a sheriff’s sle, where the property is auctoned. The timeline for foreclosure start to sheriff’s sale varies based on the court schedule and specific case details.

Judicial Foreclosure Procedure

The typical judicial foreclosure process involves several key steps: 

  1. Filing the foreclosure petition

If the borrower does not cure the default or reach an alternative arrangement with the lender, the lender can file a petition with the district court. The petition includes details about the loan, the default, and the property. 

  1. Service of process

Once the petition is filed, the borrower is served with a summons and a copy of the foreclosure petition. The borrower has 20 days to respond to the complaint. If the borrower doesn’t respond, the lender can request a default judgment to hold a foreclosure sale. 

  1. Discovery and trial

After answering the complaint, the foreclosure lawsuit will then enter the discovery phase, in which both parties gather and share evidence. Negotiations typically occur during this time, and if an agreement is not reached, the case will proceed to trial.

  1. Foreclosure sale

If a judgment is entered for the lender, the property will be sold at a public auction conducted by the sheriff or a court-appointed trustee. The property is then sold to the highest bidder. 

  1. Right of redemption

Iowa law provides homeowners facing foreclosure a right of redemption in certain cases. This right allows the borrower to reclaim the property by paying the balance owed and any additional costs. In some cases, you may be able to redeem your property for up to one year after the foreclosure sale. If the lender waives a deficiency judgment, this period may be shortened to six months.

Before the property is sold, you can also file a “Demand for Delay of Sale.” This will give you an additional six months before the foreclosure sale to try to redeem your property.

  1. Deficiency judgment

If the foreclosure sale price is lower than the amount owed on the property, the lender can ask the court to award them the difference between the debt and the sale price paid by the borrower. This is a money judgment, and the lender can take various actions to collect on this judgment, like wage garnishment. A lender can’t get a deficiency judgment if it waives redemption, reduces the redemption period, or forecloses without redemption.

The attorneys at Henkels & Baker, PC, have an in-depth understanding of state and federal foreclosure laws. We put our experience to work by providing our clients with tailored guidance based on their unique situations.

Alternatives to Foreclosure

Foreclosure can significantly impact your credit score, affecting your future borrowing capacity and financial stability. If your lender files foreclosure, you should explore all available options.

Common alternatives include bankruptcy, loan modification, a short sale, or forbearance. Speaking with your lender and a foreclosure attorney can help you determine what avenues are available to save your home and your financial well-being.


Two common bankruptcy options for individual bankruptcy are Chapter 7 and Chapter 13 bankruptcy. Each has its benefits and risks for individuals facing foreclosure and other debt issues.

A Chapter 7 bankruptcy is a liquidation bankruptcy, meaning that your valuable assets will be sold to pay off outstanding debts. Filing for Chapter 7 bankruptcy can temporarily pause foreclosure, allowing homeowners time to explore other options or negotiate with lenders. 

Chapter 13 bankruptcy, on the other hand, is available for individuals with disposable income. It offers a structured repayment plan so borrowers can catch up on missed payments while retaining their property.

A foreclosure and bankruptcy attorney in Iowa can help you understand these alternatives and evaluate the right option for you. At Henkels & Baker, PC, we help Iowa homeowners understand their rights, explore defenses against foreclosure, and navigate legal procedures.

Facing Foreclosure? Contact Henkels & Baker, PC, Today

At Henkels & Baker, PC, we work closely with individuals to assess their situation and explore appropriate avenues to relief. Our foreclosure attorneys will craft a customized plan to mitigate foreclosure risks and actively pursue alternatives like bankruptcy or loan modifications.

Since 1973, we have helped clients struggling with debt and have consistently achieved positive outcomes. Our lawyers are committed to providing personalized, compassionate, and professional legal assistance.

Don’t face foreclosure alone! Contact us for a free consultation today. 

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