SUBCHAPTER IGENERAL PROVISIONS
654.1 Equitable proceedings.
Except as provided in
section 654.18, a deed of trust or mortgage of real estate shall not be foreclosed in any other manner than by action in court by equitable
proceedings.
[C51, §2083, 2096; R60, §3660, 3673, 4179; C73, §3319; C97, §4287; C24, 27, 31, 35, 39, §12372; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §654.1]
654.1A Maintenance of mortgagor protections — discontinuation of occupation.
For purposes of
sections 615.1,
615.3,
628.28,
654.2D,
654.20,
654.21, and
654.26, property shall be deemed the residence of and occupied by the mortgagor where occupation has ceased because of the effects
of natural disaster, injury to the property not willfully caused by the mortgagor, or the mortgagor’s national guard duty
or federal active duty as those terms are defined in
section 29A.1.
Deeds of trust of real property may be executed as securities for the performance of contracts, and shall be considered as,
and foreclosed like, mortgages.
[C51, §2096; R60, §3673; C73, §3318; C97, §4284; C24, 27, 31, 35, 39, §12373; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §654.2]
654.2A Agricultural land — notice, right to cure default.
1. A creditor shall not initiate an action pursuant to this chapter to foreclose on a deed of trust or mortgage on agricultural land, as defined in section 9H.1, until the creditor has complied with this section.
2. A creditor who believes in good faith that a borrower on a deed of trust or mortgage on agricultural land is in default may
give the borrower notice of the alleged default, and, if the borrower has a right to cure the default, shall give the borrower
the notice of right to cure provided in section 654.2B. The notice is deemed received if sent by certified mail to the borrower.
3. The borrower has a right to cure the default unless the creditor has given the borrower a proper notice of right to cure with
respect to two prior defaults on the obligation secured by the deed of trust or mortgage, or the borrower has voluntarily
surrendered possession of the agricultural land and the creditor has accepted it in full satisfaction of any debt owing on
the obligation in default. The borrower does not have a right to cure the default if the creditor has given the borrower a
proper notice of right to cure with respect to a prior default within twelve months prior to the alleged default.
4. If the borrower has a right to cure a default: a. A creditor shall not accelerate the maturity of the unpaid balance of the obligation, demand or otherwise take possession
of the land, other than by accepting a voluntary surrender of it, or otherwise attempt to enforce the obligation until forty-five
days after a proper notice of right to cure is given. The time period for a request for mediation pursuant to chapter 654A shall run concurrently with the period for the notice to cure under this section.
b. Until the expiration of forty-five days after notice is given, the borrower may cure the default by tendering either the amount
of all unpaid installments due at the time of tender, without acceleration, plus a delinquency charge of the scheduled annual
interest rate plus five percent per annum for the period between the giving of the notice of right to cure and the tender,
or the amount stated in the notice of right to cure, whichever is less, or by tendering any performance necessary to cure
a default other than nonpayment of amounts due, which is described in the notice of right to cure.
5. The act of curing a default restores to the borrower the borrower’s rights under the obligation and the deed of trust or mortgage,
except as provided in subsection 3.
6. This section does not prohibit a borrower from voluntarily surrendering possession of the agricultural land, and does not prohibit the
creditor from enforcing the creditor’s interest in the land at any time after compliance with this section.
654.2B Requirements of notice of right to cure.
The notice of right to cure shall be in writing and shall conspicuously state the name, address, and telephone number of the
creditor or other person to which payment is to be made, a brief identification of the obligation secured by the deed of trust
or mortgage and of the borrower’s right to cure the default, a statement of the nature of the right to cure the default, a
statement of the nature of the alleged default, a statement of the total payment, including an itemization of any delinquency
or deferral charges, or other performance necessary to cure the alleged default, and the exact date by which the amount must
be paid or performance tendered and a statement that if the borrower does not cure the alleged default the creditor or a person
acting on behalf of the creditor is entitled to proceed with initiating a foreclosure action or procedure. The failure of
the notice of right to cure to comply with one or more provisions of
this section is not a defense or claim in any action pursuant to
this chapter and does not invalidate any procedure pursuant to
chapter 655A, unless the person asserting the defense, claim, or invalidity proves that the person was substantially prejudiced by such
failure.
654.2C Mediation notice — foreclosure on agricultural property.
A person shall not initiate a proceeding under
this chapter to foreclose a deed of trust or mortgage on agricultural property, as defined in
section 654A.1, which is subject to
chapter 654A and which is subject to a debt of twenty thousand dollars or more under the deed of trust or mortgage unless the person receives
a mediation release under
section 654A.11, or unless the court determines after notice and hearing that the time delay required for the mediation would cause the person
to suffer irreparable harm. Title to land that is agricultural property is not affected by the failure of any creditor to
receive a mediation release, regardless of its validity.
654.2D Nonagricultural land — notice, right to cure default.
2. A creditor who believes in good faith that a borrower on a deed of trust or mortgage on a homestead is in default shall give
the borrower a notice of right to cure as provided in section 654.2B. A creditor gives the notice when the creditor delivers the notice to the consumer or mails the notice to the borrower’s
residence as defined in section 537.1201, subsection 4.
3. The borrower has a right to cure the default within thirty days from the date the creditor gives the notice.
4. a. The creditor shall not accelerate the maturity of the unpaid balance of the obligation, demand or otherwise take possession
of the land, otherwise than by accepting a voluntary surrender of it, or otherwise attempt to enforce the obligation until
thirty days after a proper notice of right to cure is given. b. Until the expiration of thirty days after notice is given, the borrower may cure the default by tendering either the amount
of all unpaid installments due at the time of tender, without acceleration, or the amount stated in the notice of right to
cure, whichever is less, or by tendering any other performance necessary to cure a default which is described in the notice
of right to cure.
5. The act of curing a default restores to the borrower the borrower’s rights under the obligation and the deed of trust or mortgage.
6. This section does not prohibit the creditor from enforcing the creditor’s interest in the land at any time after the creditor has complied
with this section and the borrower did not cure the alleged default.
7. A borrower has a right to cure the default unless the creditor has given the borrower a proper notice of right to cure with
respect to a prior default which occurred within three hundred sixty-five days of the present default.
8. This section does not apply if the creditor is an individual or individuals, or if the mortgaged property is property other than a one-family
or two-family dwelling which is the residence of the mortgagor.
9. An affidavit signed by an officer of the creditor that the creditor has complied with this section is deemed to be conclusive evidence of compliance by all persons other than the creditor and the mortgagor.
10. As used in this section, “creditor” includes a person acting on behalf of a creditor.
An action for the foreclosure of a mortgage of real property, or for the sale thereof under an encumbrance or charge thereon,
shall be brought in the county in which the property to be affected, or some part thereof, is situated.
[C73, §2578; C97, §3493; C24, 27, 31, 35, 39, §12374; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §654.3]
654.4 Separate suits on note and mortgage.
If separate actions are brought in the same county on the bond or note, and on the mortgage given to secure it, the plaintiff
must elect which to prosecute. The other will be discontinued at the plaintiff’s cost.
[C51, §2086; R60, §3663; C73, §3320; C97, §4288; C24, 27, 31, 35, 39, §12375; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §654.4]
654.4A Service of process — in rem relief.
In addition to any other form of service authorized by law, where in rem relief is the only relief requested in a foreclosure
action or nonjudicial foreclosure under
section 654.18 or
chapter 655A against either a party or a person to be served with a notice pursuant to
section 654.15B, all of the following shall apply:
1. If the person to be served is a judgment creditor, service may be made by certified mail, with proof of delivery, to the judgment
creditor’s registered agent or to the judgment creditor at the judgment creditor’s principal place of business in the state
where the business is organized, as indicated by the records in the office of the secretary of state, or to the judgment creditor
at the last address indicated in the case in which the judgment was entered.
2. Upon affidavit that service cannot be made on a judgment creditor either pursuant to subsection 1 or by personal service in this state, service may be made by certified mail, with proof of delivery, on the judgment creditor’s
attorney of record if that attorney is a practicing attorney in this state, along with a copy of this section, and a payment of ten dollars. The attorney shall forward the notice by ordinary mail to the judgment creditor’s last known
address but the attorney shall have no further duties under this section with respect to the notice.
3. An attorney who agrees to accept service on behalf of a judgment creditor may charge a reasonable fee, not to exceed ten dollars,
for accepting service.
4. If a person, other than a governmental taxing unit, is an interested person with respect to a decedent’s estate in probate,
the person may be named generally as a person interested in the decedent’s estate and service of process shall be made by
personal service or certified mail, along with proof of delivery, on the attorney for the personal representative. If the
estate is probated in this state and a person has requested notice pursuant to section 633.42, the mortgagee shall also serve that person or the person’s attorney by ordinary mail at the address specified in the request
for notice. A person so served may intervene as a named defendant as a matter of right.
5. If a defendant, other than a governmental taxing unit, is a person whose identity is not reasonably ascertainable, and the
person has an interest in a decedent’s estate not probated in this state, such person may be named generally as a person with
an interest in the decedent’s estate and service of process shall be made by publication unless the mortgagee has actual notice
that the decedent’s estate is probated in another state. A person so served may intervene as a named defendant as a matter
of right.
654.4B Acceleration of indebtedness — notice of mortgage mediation assistance.
1. Prior to commencing a foreclosure on the accelerated balance of a mortgage loan and after termination of any applicable cure
period, including but not limited to those provided in section 654.2A or 654.2D, a creditor shall give the borrower a fourteen-day demand for payment of the accelerated balance to qualify for an award
of attorney fees under section 625.25 on the accelerated balance.
2. Prior to filing a petition under this chapter on a one-family or two-family dwelling that is the residence of the owner, the creditor shall inform the owner of the availability
of counseling and mediation on a form as the attorney general may prescribe. The notice required by this section shall be mailed by ordinary mail to the owner along with the notice of acceleration or other initial communication from the
attorney representing the creditor in the action, and shall also be served on the owner with the original notice and petition
seeking foreclosure. If, following application by the owner or on its own motion, the court finds that the notice was not
served on the owner as required by this subsection and that the owner desires counseling or mediation, the court shall grant to the owner a delay of the sheriff’s sale or,
in the event the sheriff’s sale has occurred and the mortgagee or its affiliate was the winning bidder at the sheriff’s sale,
a delay of the recording of the sheriff’s deed. In either case, the delay shall not exceed sixty days. If the affidavit of
service for the original notice in the court file indicates that the notice required by this subsection was served on the owner, there shall be a rebuttable presumption that the notice was served as required by this subsection. The court may grant an application for a delay pursuant to this subsection ex parte only if the court file does not show service of the notice on the owner along with the original notice. Objection
to the failure of the mortgagee to serve the notice is barred unless an application under this subsection is timely filed and is granted before the date of the sale or recording, respectively. If the court delays the sheriff’s
sale, the new sale date and time shall be announced orally by the sheriff at the time previously scheduled for sale, and the
mortgagee need not republish and serve notice of the rescheduled sale.
2009 Acts, ch 51, §6, 16, 17; 2011 Acts, ch 134, §17, 29; 2012 Acts, ch 1134, §17, 21; 2013 Acts, ch 139, §54
654.5 Judgment — sale and redemption.
1. When a mortgage or deed of trust is foreclosed, the court shall do all of the following: a. Render judgment for the entire amount found to be due.
b. Direct the mortgaged property, or so much thereof as is necessary, to be sold to satisfy the judgment, with interest and costs.
c. Determine issues of title raised in the pleadings to establish the rights and priorities of the parties and persons served
with notice pursuant to section 654.15B in the property subject to foreclosure as may be reasonably necessary to allow a purchaser at a sheriff’s sale to obtain
clear title.
2. A special execution shall issue under such conditions as the decree may prescribe, and the sale under the special execution
is subject to redemption as in cases of sale under general execution unless the plaintiff has elected foreclosure without
redemption under section 654.20.
3. The clerk shall provide a copy of the decree by ordinary or electronic mail to all parties in the foreclosure proceeding and
all persons served with notices under section 654.15B.
[C51, §2084; R60, §3661; C73, §3321; C97, §4289; C24, 27, 31, 35, 39, §12376; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §654.5]
654.6 Deficiency — general execution.
If the mortgaged property does not sell for an amount which is sufficient to satisfy the execution, a general execution may
be issued against the mortgagor, unless the parties have stipulated otherwise.
[C51, §2085; R60, §3662; C73, §3322; C97, §4290; C24, 27, 31, 35, 39, §12377; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §654.6]
If there is an overplus remaining after satisfying the mortgage and costs, and if there is no other lien upon the property,
such overplus shall be paid to the mortgagor.
[C51, §2089; R60, §3666; C73, §3324; C97, §4291; C24, 27, 31, 35, 39, §12378; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §654.7]
654.8 Junior encumbrancer entitled to assignment.
At any time prior to the sale, a person having a lien on the property which is junior to the mortgage will be entitled to
an assignment of all the interest of the holder of the mortgage, by paying the holder the amount secured, with interest and
costs, together with the amount of any other liens of the same holder which are paramount to the person’s. The person may
then proceed with the foreclosure, or discontinue it, at the person’s option.
[C51, §2088; R60, §3665; C73, §3323; C97, §4292; C24, 27, 31, 35, 39, §12379; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §654.8]
654.9 Payment of other liens — rebate of interest.
If there are any other liens on the property sold, or other payments secured by the same mortgage, they shall be paid off
in their order. If the money secured by any such lien is not yet due, a rebate of interest, to be fixed by the court must
be made by the holder, or the holder’s lien on such property will be postponed to those of a junior date, and if there are
none such, the balance shall be paid to the mortgagor.
[C51, §2090; R60, §3667; C73, §3325; C97, §4293; C24, 27, 31, 35, 39, §12380; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §654.9]
654.9A Release of superior liens by bond.
At any time prior to the court’s decree, the plaintiff, or a person guaranteeing title of the plaintiff’s mortgage, may post
a bond with sureties to be approved by the clerk and apply to the court to release the claim against the property of any person
claiming a lien superior to that of the plaintiff in the property subject to foreclosure. The bond shall be in an amount not
less than twice the amount of the claim, and notice of the bond and the court’s order of release shall be served on the claimant.
Unless the claimant has appeared in the foreclosure action, the service shall be by personal service. Unless the claimant
files an action on the bond within twelve months from service of the notice, the claimant shall be barred from any further
remedy. In a successful action on the bond, the court may award the claimant reasonable attorney fees. A guarantor filing
such a bond shall be subrogated to any defenses which the plaintiff may have against the adverse claimant, including but not
limited to a defense of lack of equity in the mortgaged property to secure the adverse claim in its proper priority.
As far as practicable, the property sold must be only sufficient to satisfy the mortgage foreclosed.
[C51, §2091; R60, §3668; C73, §3326; C97, §4294; C24, 27, 31, 35, 39, §12381; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §654.10]
654.11 Foreclosure of title bond.
In cases where the vendor of real estate has given a bond or other writing to convey the same on payment of the purchase money,
and such money or any part thereof remains unpaid after the day fixed for payment, whether time is or is not of the essence
of the contract, the vendor may file a petition asking the court to require the purchaser to perform the purchaser’s contract,
or to foreclose and sell the purchaser’s interest in the property.
[C51, §2094; R60, §3671; C73, §3329; C97, §4297; C24, 27, 31, 35, 39, §12382; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §654.11]
654.12 Vendee deemed mortgagor.
The vendee shall in such cases, for the purpose of the foreclosure, be treated as a mortgagor of the property purchased, and
the vendee’s rights may be foreclosed in a similar manner.
[C51, §2095; R60, §3672; C73, §3330; C97, §4298; C24, 27, 31, 35, 39, §12383; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §654.12]
654.12A Priority of advances under mortgages.
1. Subject to section 572.18, if a prior recorded mortgage contains the notice prescribed in this section and identifies the maximum credit available to the borrower, then loans and advances made under the mortgage, up to the maximum
amount of credit together with interest thereon, are senior to indebtedness to other creditors under subsequently recorded
mortgages and other subsequently recorded or filed liens even though the holder of the prior recorded mortgage has actual
notice of indebtedness under a subsequently recorded mortgage or other subsequently recorded or filed lien. So long as credit
is available to the borrower, payment of the outstanding mortgage balance to zero shall not extinguish the prior recorded
mortgage if it contains the notice prescribed by this section. The notice prescribed by this section for the prior recorded mortgage is as follows:
NOTICE: This mortgage secures credit in the amount of ......................... Loans and advances up to this amount, together with interest, are senior to indebtedness to other creditors under subsequently
recorded or filed mortgages and liens.
2. However, the priority of a prior recorded mortgage under this section does not apply to loans or advances made after receipt of notice of foreclosure or action to enforce a subsequently recorded
mortgage or other subsequently recorded or filed lien.
654.12B Priority of recorded purchase money mortgage lien.
1. The lien created by a recorded purchase money mortgage shall have priority over and is senior to preexisting judgments against
the purchaser and any other right, title, interest, or lien arising either directly or indirectly by, through, or under the
purchaser. A mortgage is a purchase money mortgage to the extent it is either: a. Taken or retained by the seller of the real estate to secure all or part of its price, including all costs in connection with
the purchase.
b. Taken by a lender who, by making an advance or incurring an obligation, provides funds to enable the purchaser to acquire
rights in the real estate, including all costs in connection with the purchase, if the funds are in fact so used. Except when
it is a refinancing of an existing purchase money mortgage between the same lender and purchaser and no new funds are advanced,
a mortgage given to secure funds which are used to pay off another mortgage is not a purchase money mortgage.
2. If more than one purchase money mortgage exists, the first mortgage to be recorded has priority. In order to be entitled to
the rights provided by this section, the mortgage must contain a recital that it is a purchase money mortgage. However, failure to include the recital in the
mortgage shall not prevent a mortgage otherwise qualifying as a purchase money mortgage from being a purchase money mortgage
for purposes other than this section. The rights in this section are in addition to, and the obligations are not in derogation of, all rights provided by common law.
654.13 Pledge of rents — priority.
Whenever any real estate is encumbered by two or more real estate mortgages which in addition to the lien upon the real estate
grant to the mortgagee the right to subject the rents, profits, avails, or income from said real estate to the payment of
the debt secured by such mortgage, the priority of the respective mortgagees under the provisions of their mortgages affecting
the rents, profits, avails, or incomes from the said real estate shall, as between such mortgagees, be in the same order as
the priority of the lien of their respective mortgages on the real estate.
[C35, §12383-e1; C39, §12383.1; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §654.13]
654.14 Preference in receivership — application of rents.
1. In an action to foreclose a real estate mortgage, if a receiver is appointed to take charge of the real estate, preference
shall be given to the owner or person in actual possession, subject to approval of the court, in leasing the mortgaged premises.
If the real estate is agricultural land used for farming, as defined in section 9H.1, the owner or person in actual possession shall be appointed as receiver without bond, provided that all parties agree to
the appointment. The rents, profits, avails, and income derived from the real estate shall be applied as follows: a. To the cost of receivership.
b. To the payment of taxes due or becoming due during said receivership.
c. To pay the insurance on buildings on the premises or such other benefits to the real estate, or both, as may be ordered by
the court.
d. The balance shall be paid and distributed as determined by the court.
2. If the owner or person in actual possession of agricultural land as defined in section 9H.1 is not afforded a right of first refusal in leasing the mortgaged premises by the receiver, the owner or person in actual
possession has a cause of action against the receiver to recover either actual damages or a one thousand dollar penalty, and
costs, including reasonable attorney fees. The receiver shall deliver notice of an offer made to the receiver to the owner
or person in actual possession or the attorney of the owner or person in actual possession, which contains the terms of the
offer and the name and address of the person making the offer. The delivery shall be made personally with receipt returned
or by certified or registered mail, with the proper postage on the envelope, addressed to the owner or person in actual possession
or the attorney of the owner or person in actual possession. An offer shall be deemed to have been refused if the owner or
person in actual possession or the attorney of the owner or person in actual possession does not respond within ten days following
the date that the notice is mailed.
[C35, §12383-e2; C39, §12383.2; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §654.14]
654.15 Continuance — moratorium.
1. a. In all actions for the foreclosure of real estate mortgages, deeds of trust of real property, and contracts for the purchase
of real estate, when the owner enters an appearance and files an answer admitting some indebtedness and breach of the terms
of the designated instrument, which admissions cannot be withdrawn or denied after a continuance is granted, the owner may
apply for a continuance of the foreclosure action if the default or inability of the owner to pay or perform is mainly due
or brought about by reason of drought, flood, heat, hail, storm, or other climatic conditions or by reason of the infestation
of pests which affect the land in controversy. The application must be in writing and filed at or before final decree. Upon
the filing of the application the court shall set a day for hearing on the application and provide by order for notice to
be given to the plaintiff of the time fixed for the hearing. If the court finds that the application is made in good faith
and is supported by competent evidence showing that default in payment or inability to pay is due to drought, flood, heat,
hail, storm, or other climatic conditions or due to infestation of pests, the court may continue the foreclosure proceeding
as follows: (1) If the default or breach of terms of the written instrument on which the action is based occurs on or before the first day
of March of any year by reason of any of the causes specified in this subsection, causing the loss and failure of crops on the land involved in the previous year, the continuance shall end on the first
day of March of the succeeding year.
(2) If the default or breach of terms of the written instrument occurs after the first day of March, but during that crop year
and that year’s crop fails by reason of any of the causes set out in this subsection, the continuance shall end on the first day of March of the second succeeding year.
(3) Only one continuance shall be granted, except upon a showing of extraordinary circumstances in which event the court may grant
a second continuance for a further period as the court deems just and equitable, not to exceed one year.
(4) The order shall provide for the appointment of a receiver to take charge of the property and to rent the property. The owner
or person in possession shall be given preference in the occupancy of the property. The receiver, who may be the owner or
person in possession, shall collect the rents and income and distribute the proceeds as follows: (a) For the payment of the costs of receivership.
(b) For the payment of taxes due or becoming due during the period of receivership.
(c) For the payment of insurance on the buildings on the premises.
(d) The remaining balance shall be paid to the owner of the written instrument upon which the foreclosure is based, to be credited
on the instrument.
b. An owner of a small business may apply for a continuance as provided in this subsection if the real estate subject to foreclosure is used for the small business. The court may continue the foreclosure proceeding
if the court finds that the application is made in good faith and is supported by competent evidence showing that the default
in payment or inability to pay is due to the economic condition of the customers of the small business, because the customers
of the small business have been significantly economically distressed as a result of drought, flood, heat, hail, storm, or
other climatic conditions or due to infestation of pests. The length of the continuance shall be determined by the court,
but shall not exceed two years.
2. In all actions for the foreclosure of real estate mortgages, deeds of trust of real estate, and contracts for the purchase
of real estate, an owner of real estate may apply for a moratorium as provided in this subsection if the governor declares a state of economic emergency. The governor shall state in the declaration the types of real estate
eligible for a moratorium continuance, which may include real estate used for farming; designated types of real estate not
used for farming, including real estate used for small business; or all real estate. Only property of a type specified in
the declaration which is subject to a mortgage, deed of trust, or contract for purchase entered into before the date of the
declaration is eligible for a moratorium. In an action for the foreclosure of a mortgage, deed of trust, or contract for purchase
of real estate eligible for a moratorium, the owner may apply for a continuation of the foreclosure if the owner has entered
an appearance and filed an answer admitting some indebtedness and breach of the terms of the designated instrument. The admissions
cannot be withdrawn or denied after a continuance is granted. Applications for continuance made pursuant to this subsection must be filed within one year of the governor’s declaration of economic emergency. Upon the filing of an application as provided
in this subsection, the court shall set a date for hearing and provide by order for notice to the parties of the time for the hearing. If the
court finds that the application is made in good faith and the owner is unable to pay or perform, the court may continue the
foreclosure proceeding as follows: a. If the application is made in regard to real estate used for farming, the continuance shall terminate two years from the date
of the order. If the application is made in regard to real estate not used for farming, the continuance shall terminate one
year from the date of the order.
b. Only one continuance shall be granted the applicant for each written instrument or contract under each declaration.
c. The court shall appoint a receiver to take charge of the property and to rent the property. The applicant shall be given preference
in the occupancy of the property. The receiver, who may be the applicant, shall collect the rents and income and distribute
the proceeds as follows: (1) For the payment of the costs of receivership, including the required interest on the written instrument and the costs of operation.
(2) For the payment of taxes due or becoming due during the period of receivership.
(3) For the payment of insurance deemed necessary by the court including but not limited to insurance on the buildings on the
premises and liability insurance.
(4) The remaining balance shall be paid to the owner of the written instrument upon which the foreclosure was based, to be credited
against the principal due on the written instrument.
d. A continuance granted under this subsection may be terminated if the court finds, after notice and hearing, all of the following: (1) The party seeking foreclosure has made reasonable efforts in good faith to work with the applicant to restructure the debt
obligations of the applicant.
(2) The party seeking foreclosure has made reasonable efforts in good faith to work with the applicant to utilize state and federal
programs designed and implemented to provide debtor relief options. For the purposes of subparagraph (1) and this subparagraph,
the determination of reasonableness shall take into account the financial condition of the party seeking foreclosure, and
the financial strength and the long-term financial survivorship potential of the applicant.
(3) The applicant has failed to pay interest due on the written instrument.
[C39, §12383.3; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §654.15]
85 Acts, ch 250, §1, 2; 86 Acts, ch 1216, §7 – 9; 87 Acts, ch 115, §80; 2007 Acts, ch 54, §43; 2013 Acts, ch 30, §261
654.15A Notice of sale to junior creditors.
A junior creditor may file and serve on the judgment creditor a request for notice of the sheriff’s sale. Such request for
notice shall include a facsimile number or electronic mail address where the creditor shall be notified of the sale. At least
ten days prior to the date of sale, the attorney for the junior creditor shall file proof of service of such request for notice.
Upon motion filed within thirty days of the sale, the court may set aside a sale in which a junior creditor who requests notice
is damaged by the failure of the sheriff or the judgment creditor to give notice pursuant to
this section.
654.15B Right to intervene — notice.
A lender may serve a judgment creditor in a foreclosure action with notice in substantially the following form advising the
creditor that the property that is the subject of the foreclosure action shall be foreclosed and describing the creditor’s
interest in the action and that unless such creditor intervenes in the foreclosure action such creditor shall lose the creditor’s
interest in the mortgaged property. Unless the creditor intervenes within thirty days of the service of notice, the court
may adjudicate the creditor’s rights against the property as if the creditor had been added as a defendant and default had
been entered against the defendant. If a creditor cannot be located for personal service, the plaintiff may, at any time prior
to sixty days before the date of trial, amend the petition as a matter of right to add the creditor as a defendant for service
by publication as provided by rule. The notice prescribed by
this section is as follows:
654.16 Separate redemption of homestead.
1. If a sheriff’s sale is ordered on agricultural land used for farming, as defined in section 16.58, the mortgagor may, by a date set by the court but not later than ten days before the sale, designate to the court the portion
of the land which the mortgagor claims as a homestead. The homestead may be any contiguous portion of forty acres or less
of the real estate subject to the sheriff’s sale. The homestead shall contain the residence of the mortgagor and shall be
as compact as practicable.
2. If a homestead is designated, the court shall determine the fair market value of the designated homestead before the sheriff’s
sale. The court may consult with the county appraisers appointed pursuant to section 450.24 for deaths occurring before January 1, 2025, or with one or more independent appraisers, to determine the fair market value
of the designated homestead.
3. The mortgagor may redeem the designated homestead by tendering the lesser of either any amount separately bid for the designated
homestead at the sheriff’s sale pursuant to procedures set forth in chapter 628, or the fair market value, as determined pursuant to this section, of the designated homestead at any time within one year from the date of the sheriff’s sale, pursuant to the procedures
set forth in chapter 628.
86 Acts, ch 1216, §2; 87 Acts, ch 142, §4, 5; 90 Acts, ch 1245, §2; 2014 Acts, ch 1080, §95, 98; 2025 Acts, ch 148, §52 – 54
654.16A Right of first refusal following recording of sheriff’s deed to agricultural land.
1. Not later than the time a sheriff’s deed to agricultural land used for farming, as defined in section 16.58, is recorded, the grantee recording the sheriff’s deed shall notify the mortgagor of the mortgagor’s right of first refusal.
The grantee shall record the sheriff’s deed within one year and sixty days from the date of the sheriff’s sale. A copy of
this section, titled “Notice of Right of First Refusal” is sufficient notice.
2. If, after a sheriff’s deed is recorded, the grantee proposes to sell or otherwise dispose of the agricultural land, in a transaction
other than a public auction, the grantee shall first offer the mortgagor the opportunity to repurchase the agricultural land
on the same terms and at the same price that the grantee proposes to sell or dispose of the agricultural land. If the grantee
seeks to sell or otherwise dispose of the agricultural land by public auction, the mortgagor must be given sixty days’ notice
of all of the following: a. The date, time, place, and procedures of the auction sale.
b. Any minimum terms or limitations imposed upon the auction.
3. The grantee is not required to offer the mortgagor financing for the purchase of the agricultural land.
4. The mortgagor has ten business days after being given notice of the terms and price of the proposed sale or disposition, other
than a public auction, in which to exercise the right to repurchase the agricultural land by submitting a binding offer to
the grantee on the same terms as the proposed sale or other disposition, with closing to occur within thirty days after the
offer unless otherwise agreed by the grantee. After the expiration of either the period for offer or the period for closing,
without submission of an offer or a closing occurring, the grantee may sell or otherwise dispose of the agricultural land
to any other person on the terms upon which it was offered to the mortgagor.
5. Notice of the mortgagor’s right of first refusal, a proposed sale, auction, or other disposition, or the submission of a binding
offer by the mortgagor, is considered given on the date that notice or offer is personally served on the other party or on
the date that notice or offer is mailed to the other party’s last known address by registered or certified mail, return receipt
requested. The right of first refusal provided in this section is not assignable, but may be exercised by the mortgagor’s successor in interest, receiver, personal representative, executor,
or heir only in case of bankruptcy, receivership, or death of the mortgagor.
654.17 Rescission of foreclosure.
1. At any time prior to the recording of the sheriff’s deed, and before the mortgagee’s rights become unenforceable by operation
of the statute of limitations, the judgment creditor, or the judgment creditor who is the successful bidder at the sheriff’s
sale, may rescind the foreclosure action by filing a notice of rescission with the clerk of court in the county in which the
property is located along with a filing fee of fifty dollars. In addition, if the original loan documents are contained in
the court file, the mortgagee shall pay a fee of twenty-five dollars to the clerk of the district court. Upon the payment
of the fee, the clerk shall make copies of the original loan documents for the court file, and return the original loan documents
to the mortgagee.
2. Upon the filing of the notice of rescission, the mortgage loan shall be enforceable according to the original terms of the
mortgage loan and the rights of all persons with an interest in the property may be enforced as if the foreclosure had not
been filed. Except as otherwise provided in this section, the filing of a rescission shall operate as a setting aside of the decree of foreclosure and a dismissal of the foreclosure
without prejudice, with costs assessed against the plaintiff. However, any findings of fact or law shall be preclusive for
purposes of any future action unless the court, upon hearing, rules otherwise and the mortgagee shall be permanently barred
from a deficiency judgment if the judgment rescinded was subject to the provisions of section 615.1. The mortgagee may charge the mortgagor for the costs, including reasonable attorney fees, of foreclosure and rescission
if agreed to in writing by the mortgagor.
2006 Acts, ch 1132, §10, 16; 2007 Acts, ch 71, §5; 2007 Acts, ch 126, §106; 2009 Acts, ch 51, §9, 17; 2017 Acts, ch 54, §76
654.17A Sale free of liens.
At any time during the pendency of the foreclosure, the plaintiff may apply to the court for an order approving an offer for
a commercially reasonable sale of the property free of the claims of the parties to the action and other persons served with
notice pursuant to
section 654.15B. A copy of the offer shall be attached to the application and the application shall contain a written consent to the proposed
sale by all equitable titleholders who have not abandoned the property. The court may grant the motion unless a party in interest
objects in writing during such time as the court may prescribe. A person filing an objection with a claim junior to the plaintiff
shall either apply for assignment of senior claims pursuant to
section 654.8, otherwise provide adequate protection to senior creditors, or establish that a sheriff’s sale is substantially more likely
than the proposed sale to provide the creditor with more favorable satisfaction of its lien. Pending resolution of the rights
of the parties and persons served with notice pursuant to
section 654.15B, the court shall place the net proceeds of the sale in escrow after payment of reasonable closing costs. The rights of such
persons to the escrowed funds shall be determined in the same manner as their rights to the property that was sold.
654.17B Divestment of junior liens pursuant to loan modification — repeal.
Repealed by its own terms; 2009 Acts, ch 51, §10.
654.17C Military foreclosure protection — notice.
1. Except as provided under chapter 29A, or the federal Servicemembers Civil Relief Act of 2003, 50 U.S.C. app. 532 and 533, a creditor shall not initiate a proceeding
to enforce an obligation payable under its terms in installments under a contract for the purchase of real estate, or secured
by a mortgage or other instrument in the nature of a mortgage upon real estate, against a borrower, or a borrower’s dependents,
who is a member of the national guard or a member of the reserve or regular component of the armed forces of the United States
in active duty service. Enforcement of an obligation shall not be permitted under the following circumstances:
b. The borrower is a member of the reserve or regular component of the armed forces of the United States in active duty service
and has been afforded protection under the federal Servicemembers Civil Relief Act of 2003, 50 U.S.C. app. 532 and 533. A
creditor who enforces an obligation in violation of the federal Act is subject to applicable penalty provisions contained
in the federal Act.
2. The department of veterans affairs and the department of insurance and financial services shall coordinate to develop a procedure
to inform or notify members of the national guard, reserve, or regular component of the armed forces of the United States,
and financial institutions as defined in section 12C.1, of the protections referenced in subsection 1. The notification procedure shall include, at a minimum, posting the information on an official internet site maintained
by each department.
SUBCHAPTER IIALTERNATIVE PROCEDURES
654.18 Alternative nonjudicial voluntary foreclosure procedure.
1. Upon the mutual written agreement of the mortgagor and mortgagee, a real estate mortgage may be foreclosed pursuant to this section by doing all of the following: a. The mortgagor shall convey to the mortgagee all interest in the real property subject to the mortgage.
b. The mortgagee shall accept the mortgagor’s conveyance and waive any rights to a deficiency or other claim against the mortgagor
arising from the mortgage.
c. The mortgagee shall have immediate access to the real property for the purposes of maintaining and protecting the property.
d. The mortgagor and mortgagee shall file a jointly executed document with the county recorder in the county where the real property
is located stating that the mortgagor and mortgagee have elected to follow the alternative voluntary foreclosure procedures
pursuant to this section.
e. (1) The mortgagee shall send by certified mail a notice of the election to all junior lienholders as of the date of the conveyance
under paragraph “a”, stating that the junior lienholders have thirty days from the date of mailing to exercise any rights of redemption. The
notice may also be given in the manner prescribed in section 656.3 in which case the junior lienholders have thirty days from the completion of publication to exercise the rights of redemption. (2) In addition to any other form of service authorized by law, service of process in an alternative nonjudicial voluntary foreclosure
procedure filed pursuant to this section where in rem relief is the only relief requested shall be served in the manner provided in section 654.4A.
f. At the time the mortgagor signs the written agreement pursuant to this subsection, the mortgagee shall furnish the mortgagor a completed form in duplicate, captioned “Disclosure and Notice of Cancellation”.
The form shall be attached to the written agreement, shall be in ten point boldface type and shall be in the following form:
2. A junior lienholder may redeem the real property pursuant to section 628.29. If a junior lienholder fails to redeem its lien as provided in subsection 1, its lien shall be removed from the property.
3. Until the completion of foreclosure pursuant to this section, the mortgagee shall hold the real property subject to liens of record at the time of the conveyance by the mortgagor. However,
the lien of the mortgagee shall remain prior to liens which were junior to the mortgage at the time of conveyance by the mortgagor
to the mortgagee and may be foreclosed as provided otherwise by law.
4. A mortgagee who agrees to a foreclosure pursuant to this section shall not report to a credit bureau that the mortgagor is delinquent on the mortgage. However, the mortgagee may report that
this foreclosure procedure was used.
654.19 Deed in lieu of foreclosure — agricultural land.
In lieu of a foreclosure action in court due to default on a recorded mortgage or deed of trust of real property, if the subject
property is agricultural land used for farming, as defined in
section 9H.1, the mortgagee and mortgagor may enter into an agreement in which the mortgagor agrees to transfer the agricultural land
to the mortgagee in satisfaction of all or part of the mortgage obligation as agreed upon by the parties. The agreement may
grant the mortgagor a right to purchase the agricultural land for a period not to exceed five years, and may entitle the mortgagor
to lease the agricultural land. The agreement shall be recorded with the deed transferring title to the mortgagee. A transfer
of title and agreement pursuant to
this section does not constitute an equitable mortgage.
654.20 Foreclosure without redemption — nonagricultural land.
1. If the mortgaged property is not used for an agricultural purpose as defined in section 535.13, the plaintiff in an action to foreclose a real estate mortgage may include in the petition an election for foreclosure without
redemption. The election is effective only if the first page of the petition contains the following notice in capital letters
of the same type or print size as the rest of the petition:
2. If the plaintiff has not included in the petition a waiver of deficiency judgment, then the notice shall include the following:
A mortgage or deed of trust shall not contain the notice under
section 654.20.
654.21 Demand for delay of sale.
At any time prior to entry of judgment, the mortgagor may file a demand for delay of sale. If the demand is filed, the sale
shall be held promptly after the expiration of two months from entry of judgment. However, if the demand is filed and the
mortgaged property is the residence of the mortgagor and is a one-family or two-family dwelling, the sale shall be held promptly
after the expiration of six months, or three months if the petition includes a waiver of deficiency judgment, from entry of
judgment. If the demand is filed, the mortgagor and mortgagee subsequently may file a stipulation that the sale may be held
promptly after the stipulation is filed and that the mortgagee waives the right to entry of a deficiency judgment. If the
stipulation is filed, the sale shall be held promptly after the filing. At any time prior to judgment, the mortgagor may pay
the plaintiff the amount claimed in the petition and, if paid, the foreclosure action shall be dismissed. At any time after
judgment and before the sale, the mortgagor may pay the plaintiff the amount of the judgment and, if paid, the judgment shall
be satisfied of record and the sale shall not be held.
654.22 No demand for delay of sale.
If the mortgagor does not file a demand for delay of sale, the sale shall be held promptly after entry of judgment.
654.23 No redemption rights after sale.
The mortgagor has no right to redeem after sale. Junior lienholders have no right to redeem after sale. The mortgagee or a
junior lienholder may purchase at the sale and, if so, acquire the same title as would any other purchaser other than the
mortgagor. If the mortgagor at the sale bids an amount equal to the judgment, the property shall be sold to the mortgagor
even though other persons may bid an amount which is more than the judgment. If the mortgagor purchases at the sale, the liens
of junior lienholders shall not be extinguished. If a person other than the mortgagor purchases at the sale, the liens of
junior lienholders are extinguished.
654.24 Deed and possession.
The purchaser at the sale is entitled to an immediate deed and immediate possession.
654.25 Application of other statutes.
If the plaintiff has elected foreclosure without redemption,
chapter 628 does not apply. A provision in a mortgage permitted by
section 628.26 or
628.27 shall not be construed as an agreement by the mortgagee not to elect foreclosure without redemption. The election may be
made in any petition filed on or after June 4, 1987. The election for foreclosure without redemption is not a waiver of the
plaintiff’s rights under
section 654.6 except as provided in
section 654.26.
654.26 No deficiency judgment in certain cases.
If the plaintiff has elected foreclosure without redemption, the plaintiff may include in the petition a waiver of deficiency
judgment. If the plaintiff has elected foreclosure without redemption and does not include in the petition a waiver of deficiency
judgment, if the mortgaged property is the residence of the mortgagor and is a one-family or two-family dwelling, and if the
mortgagor does not file a demand for delay of sale under
section 654.21, then the plaintiff shall not be entitled to the entry of a deficiency judgment under
section 654.6.