Iowa Modifies Provisions Regarding Redemption of Property
Iowa has amended its provisions regarding redemption of real property. Under the new provisions, the time periods for redeeming real property from foreclosure and for delaying sale of a foreclosed property have been reduced. These changes are effective as of July 1, 2018.
Right of Redemption
Under the previous provision, a mortgagor had three years to redeem real property subject to a foreclosed mortgage. The new provision shortens this redemption period to eighteen months from the day of sale. A mortgagor’s right of redemption is exclusive for the first fifteen months. The time for redemption for creditors has been shortened from thirty-three months to sixteen months.
Agreement to Reduce Period of Redemption
A mortgagor and mortgagee of ten or fewer acres of real property may agree to reduce the period of redemption to six months. The new provision adds that the period of redemption may be reduced to three months if the property is not used for agricultural purposes.
Notice of Foreclosure without Redemption
If the real property is not used for agricultural purposes, a plaintiff in a foreclosure action may petition an election for foreclosure without redemption. The first page of the petition must contain a specific notice, which is detailed in the provision. Under the amended provision, the defendant in the foreclosure action can delay the sale by six months by filing a written demand. Under the previous version of the provision, the sale could be delayed for a full year.
For the full text of House File 2234, please refer to https://www.legis.iowa.gov/docs/publications/LGE/87/HF2234.pdf
Elizabeth Dailey, JD, is a Regulatory Compliance Director with CLA. She is a graduate of the University of New Hampshire and earned her juris doctor at New England Law. She is admitted to the Massachusetts Bar.
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