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PAG LIN
1 1 Section 1. Section 654.23, Code 1995, is amended to read
1 2 as follows:
1 3 654.23 NO REDEMPTION RIGHTS AFTER SALE.
1 4 1. The mortgagor has no right to redeem after a sale
1 5 conducted pursuant to section 654.20, except as provided in
1 6 subsection 2. Junior lienholders have no right to redeem
1 7 after a sale conducted pursuant to section 654.20, except as
1 8 provided in subsection 2. The mortgagor or a junior
1 9 lienholder may purchase at the sale and, if so, acquire the
1 10 same title as would any other purchaser. If the mortgagor at
1 11 the sale bids an amount equal to the judgment, the property
1 12 shall be sold to the mortgagor even though other persons may
1 13 bid an amount which is more than the judgment. If the
1 14 mortgagor purchases at the sale, the liens of junior
1 15 lienholders shall not be extinguished. If a person other than
1 16 the mortgagor purchases at the sale, the liens of junior
1 17 lienholders are extinguished.
1 18 2. a. If the United States is named in a foreclosure
1 19 action filed under section 654.20, and the sale is made to
1 20 satisfy a lien that is prior in interest to one or more liens
1 21 held by the United States, such that the United States
1 22 possesses a right to redeem the property under 28 U.S.C. }
1 23 2410 or other federal law, the mortgagor or any junior
1 24 lienholder may exercise a right to redeem during any
1 25 redemption period available to the United States, unless the
1 26 United States has consented to the sale of the property free
1 27 of its liens.
1 28 b. The provisions of chapter 628 govern redemption rights
1 29 among competing lienholders in a foreclosure subject to
1 30 paragraph "a", except that:
1 31 (1) Sections 628.1A, 628.2, 628.3, 628.5, 628.15, 628.16,
1 32 628.26, 628.26A, 628.27, 268.28, and 628.29 shall not apply.
1 33 (2) Section 628.11 shall not apply to the terms payable
1 34 for redemption of the property by the United States, unless
1 35 the applicable federal law fails to specify the redemption
2 1 amount to be paid by the United States.
2 2 (3) Any section of chapter 628 that is inconsistent with
2 3 federal law shall not apply.
2 4 EXPLANATION
2 5 Under section 654.20, a lienholder may elect a procedure
2 6 that pursues a judicial foreclosure, against nonagricultural
2 7 land, in which neither the mortgagor nor the junior
2 8 lienholders possess any redemption rights. However, if the
2 9 federal government is a junior lienholder, it would retain a
2 10 right to redeem (for up to one year, depending upon the type
2 11 of lien held by the government), pursuant to 28 U.S.C. } 2410
2 12 and case law under that statute and the supremacy clause, in
2 13 spite of the prohibition of such a right under the Iowa
2 14 statute. Because a redemption right exists for a federal
2 15 lienholder in such circumstances, and thereby has already
2 16 defeated the benefits of quick, clear title that this
2 17 procedure normally permits a senior lienholder to pursue, this
2 18 bill makes the right of redemption equally available to the
2 19 nonfederal junior lienholders during that time period.
2 20 The bill also applies chapter 628 to these redemptions, in
2 21 order to provide a mechanism for regulating the interests of
2 22 competing lienholders. Chapter 628 governs redemption rights
2 23 in foreclosures, but is excluded, in section 654.25, from
2 24 application to foreclosures without redemption conducted under
2 25 section 654.20. However, because case law under the federal
2 26 statute has held the federal provisions supreme over
2 27 conflicting state statutory provisions on redemption, certain
2 28 sections of chapter 628 that conflict with the federal
2 29 statute, as well as those sections that conflict with the new
2 30 redemption rights created under section 654.20, have been
2 31 excluded from application to these redemptions.
2 32 LSB 3253HH 76
2 33 jls/sc/14.1
Text: HF02029 Text: HF02031 Text: HF02000 - HF02099 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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