My house in Iowa is being foreclosed. I’d like to postpone the sale to give me some time to come up with the money needed to stop the foreclosure. Is there any way for me to delay the sale under Iowa law?
Yes. You can delay the sale if the foreclosure is judicial without a right of redemption. (The different types of foreclosure processes in Iowa are explained in more detail below.)
What is a judicial foreclosure? Foreclosures in Iowa are typically judicial, which means the lender files a lawsuit in state court to foreclose your home.
What is a right of redemption? In Iowa, certain foreclosed homeowners get a limited amount of time to repurchase or “redeem” the home after a foreclosure sale. This is called the right of redemption. (Learn more about the redemption period after an Iowa foreclosure.)
When You Can Delay the Foreclosure Sale
In Iowa, there are several types of foreclosure processes:
- judicial with redemption
- judicial without redemption, or
- nonjudicial (under certain circumstances), which means the foreclosure takes place without court supervision. (To learn more about the different foreclosure procedures in Iowa, visit Nolo’s Iowa Foreclosure Law Center.)
Under Iowa law, if the foreclosure is judicial without redemption, you can demand a delay of sale (Iowa Code § 654.20). How to know if yours is a judicial without redemption foreclosure? You’ll get a notice that describes your rights along with the foreclosure petition (Iowa Code § 654.20).
How to Demand a Delay of Sale
To delay the foreclosure sale, you must file a written demand with the court. You must do this before the court enters a judgment against you in the foreclosure action (Iowa Code § 654.21). (To get help with drafting the demand in the proper format, consult with an Iowa attorney.)
How Much Time You’ll Get if You Demand a Delay of Sale
Exactly how long of a delay you’ll get depends on whether the foreclosing lender is seeking a deficiency judgment, which is a personal judgment for the difference between the foreclosure sale price and the total debt you owe. (Learn more about Deficiency Judgments After Foreclosure in Iowa.)
If you file a demand for delay of sale, the sale will be delayed for:
- six months from the date of the entry of judgment, if the foreclosure petition (the document that the lender files with the court to start the foreclosure) includes a waiver of a deficiency judgment, or
- 12 months from the date of the entry of judgment, if the petition does not include a waiver of a deficiency judgment (Iowa Code § 654.21). (However, if you don't file a demand for delay of sale, the lender can't get a deficiency judgment even without a waiver.) (Iowa Code § 654.26).
This all means that there's a downside to filing a demand for delay of sale -- the lender could go after you for a deficiency judgment when it might not otherwise be able to. You may wish to consult with an Iowa attorney to discuss the pros and cons of asking for a delay of sale and risking a deficiency judgment if the lender does not waive the deficiency judgment in the petition.
To be eligible for a six-month or twelve-month delay of sale, the home must be:
- your residence
- a one-family or two-family dwelling, and
- not agricultural (Iowa Code § 654.20, § 654.21).
If the property is not your residence or is your residence but not a one-family or two-family dwelling, you can delay the sale for two months from when the court enters judgment. A deficiency judgment may be entered against you even if you do not file a written demand to delay the sale in this situation (Iowa Code § 654.20).
Your Options for Keeping the Home
During the delay you have the right to redeem the home before the sale by paying the foreclosing lender the full amount of the mortgage debt (Iowa Code § 654.21). This will stop the foreclosure sale. (You cannot redeem the home after the sale.)
While you do not specifically get a right under Iowa law to catch up on the past-due amounts to reinstate the mortgage loan during this time, you may be able to negotiate a reinstatement with the lender. You may also be able to arrange an alternative to foreclosure, such as a mortgage modification.
How to Find Iowa’s Foreclosure Delay Laws
To find the statutes that cover delaying the sale in a judicial foreclosure without redemption in Iowa, go to Title XV (Judicial Branch and Judicial Procedures), Chapter 654 of the Iowa Code.