Are You In Foreclosure In Iowa? Here’s How Iowa Mortgage Foreclosures Work And How To Be Prepared
Pretty much everyone knows that when you fail to make your mortgage payments the lender can foreclose. Lender does this to get the home and land back. However, it should be noted that other events can start a foreclosure.
Iowa mortgage foreclosures may begin if the borrower violates any other condition of the mortgage. For example, the buyer may fail to keep the property in good repair. A lender may also commence with foreclosure if a borrower adds someone on title without prior approval from the lender.
Chapter 654 of the Iowa Code governs mortgage foreclosures. The Iowa Code can on the Internet on the Iowa Legislature’s website at www.legis.state.ia.us/Code.html
What Actions Must the Lender Take Prior to Filing a Foreclosure?
Iowa law requires a lender to follow specific steps after a borrower goes into default. Iowa Code §654.2D requires the lender to give the borrower a “notice of right to cure” notice before foreclosing.
Code §654.2B says the notice of right to cure must meet these requirements:
- It must be in writing;
- The notice must also state the name, address, and telephone number of the creditor;
- It must briefly identify the obligation secured by the mortgage;
- The notice must also advise the borrower of his or her right to cure the default;
- It must state the nature of the alleged default;
- It must state the total payment due to cure the default if the default. The notice must also include an itemization of any late charges;
- If the default is regarding a nonpayment issue, the notice must state what action is necessary to cure the default;
- It must also state the date by which the amount must be paid or the specified actions performed;
- The notice must also state what the consequences are if the borrower does not cure the alleged default.
The Sooner You Get Help The Easier
A borrower needs to contact a lawyer when they get a thirty-day notice of right to cure. A lawyer can help them negotiate a deal with the lender. Trust us, it’s easier to resolve the foreclosure at this point than waiting and procrastinating.
The borrower has thirty days from the date of the notice to cure the default. If the borrower cures the default within the thirty-day time period, everything goes back to normal.
On the other hand, the lender can accelerate the mortgage if the borrower fails to cure the default. The lender can declare that the entire unpaid loan balance is due. Remember, the lender is only required to serve a thirty-day notice to cure once per year.
However, the lender can initiate foreclosure proceedings without serving notice if the borrower goes into default a second time within 12 months.
You need to also remember, lender’s failure to give the borrower a proper notice of right to cure is not an affirmative defense to foreclosure.
