I’ve lived in my Iowa home (a single-family residence) for many years. A couple of months ago I got laid off and quit making my monthly mortgage payments. My lender has started a foreclosure, but I’m wondering if Iowa law permits me to get my house back after the foreclosure sale. If I lose the house to foreclosure, can I reclaim it afterwards? There must be some law that helps me out in this situation.
In Iowa, you can repurchase or “redeem” your home after losing it in a foreclosure, but only under certain circumstances and for a limited period of time.
Whether you can redeem your house (as well as when you can redeem) depends on if the foreclosure was a judicial foreclosure (where the lender files a lawsuit in court to foreclose), a judicial foreclosure without redemption, or an alternative nonjudicial voluntary foreclosure (which is a process where the homeowner voluntarily transfers title to the home to the lender). In a nutshell, here are the rules that apply to your situation (which are explained in more detail below):
Judicial foreclosure. If the foreclosure is judicial, you can redeem your home either:
- within one year after the foreclosure sale or
- within six months after the sale, if agreed upon in the mortgage documents, the property consists of less than ten acres, and the lender waives a deficiency judgment. (Learn more about Deficiency Judgments After Foreclosure in Iowa.)
Judicial foreclosure without redemption. If the lender elects to foreclose without redemption, you can demand a delay of sale and redeem before the sale. You have no right of redemption after the sale.
Alternative nonjudicial voluntary foreclosure. If you agree to this type of foreclosure, you don’t get a redemption period.
When You Can Get Your Home Back After a Judicial Foreclosure in Iowa
In Iowa, the redemption period after a judicial foreclosure is one year from the date of sale (Iowa Code § 628.3). However, the mortgage contract may shorten the redemption period to six months if the lender waives the deficiency in the foreclosure action and the property consists of less than ten acres (Iowa Code § 628.26). If you abandon the home and the property consists of less than ten acres (and the lender waives the deficiency judgment), the redemption period is reduced to 60 days (Iowa Code § 628.27).
If you don’t redeem the home within this time frame, your right to redeem expires. After that, you won’t have another opportunity to get your house back. (Learn more general information about the right of redemption.)
In order to redeem, you must pay to the court clerk’s office the full price that the purchaser paid at the foreclosure sale, plus all other lawful charges such as costs and interest from the date of the sale (Iowa Code § 628.13.)
You Can Redeem Your Home Before the Sale in a Foreclosure Without Redemption
The lender may choose to foreclose judicially without redemption. If the lender proceeds in this manner, it must include a notice that it is doing so when it serves you with the petition for foreclosure (Iowa Code § 654.20).
In this type of foreclosure, the sale takes place immediately after the court enters a judgment in your foreclosure case, unless you file a written demand to delay the sale. If you file a written demand, the sale is delayed:
- 12 months from the date of the entry of judgment, or
- six months from the date of the entry of judgment, if the foreclosure petition includes a waiver of the right to a deficiency judgment (Iowa Code § 654.20).
At any time before the court enters a judgment, you can redeem the home by paying the plaintiff (the foreclosing party, which will probably be the lender or servicer) the amount claimed in the petition (Iowa Code § 654.21). The foreclosure will then be dismissed. After the judgment, but before the sale, you can redeem by paying the plaintiff the amount stated in the judgment (Iowa Code § 654.21). This stops the sale and cancels the foreclosure.
You do not get a right of redemption after the sale (Iowa Code § 654.23).
You Cannot Get Your Home Back After an Alternative Nonjudicial Voluntary Foreclosure
If you and the lender agree to an alternative nonjudicial voluntary foreclosure procedure (in writing), this means that you voluntarily give up possession of the home by conveying it to the lender and, in turn, the lender agrees to waive any deficiency. You don’t get a redemption period with this type of foreclosure (Iowa Code § 654.18).
If You Can, Work Out an Agreement With the Lender Before the Sale
Even though you may get the chance to redeem your home after a judicial foreclosure in Iowa, in most cases, it is better to take action before the foreclosure sale if you want to keep your home. This will give you more options to save the property. For example, you might be able to:
- reinstate the loan by paying off the past-due amounts, or
- arrange an alternative to foreclosure that will allow you to keep the property, such as a mortgage modification, forbearance agreement, or repayment plan.
Judicial foreclosures in Iowa generally only take a few months to complete so be sure to explore alternatives to foreclosure as soon as possible. (To learn more about foreclosure laws and procedures in Iowa, visit Nolo’s Iowa Foreclosure Law Center.)
How to Find Iowa’s Redemption Laws
To find the statutes that discuss your right to redeem the home after a foreclosure in Iowa, go to Title XV (“Judicial Branch and Judicial Procedures”), Chapter 628 and Chapter 654 of the Iowa Code.