Senate
Study
Bill
1041
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
JUDICIARY
BILL
BY
CHAIRPERSON
FRAISE)
A
BILL
FOR
An
Act
relating
to
the
foreclosure
of
a
real
estate
mortgage.
1
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
2
TLSB
1578SC
(3)
84
rh/sc
S.F.
_____
Section
1.
Section
654.5,
subsection
2,
Code
2011,
is
1
amended
to
read
as
follows:
2
2.
a.
A
special
execution
shall
issue
under
such
conditions
3
as
the
decree
may
prescribe,
and
the
sale
under
the
special
4
execution
is
subject
to
redemption
as
in
cases
of
sale
under
5
general
execution
unless
the
plaintiff
has
elected
foreclosure
6
without
redemption
under
section
654.20
.
7
b.
A
successful
bidder
at
the
sale
who
is
not
affiliated
8
with
the
judgment
creditor
may
elect
to
receive,
in
lieu
9
of
a
sheriff’s
deed
or
sheriff’s
certificate
of
sale,
an
10
assignment
without
recourse
by
operation
of
law
of
all
of
the
11
judgment
creditor’s
interest
in
the
judgment,
the
underlying
12
indebtedness,
and
any
policies
of
title,
property,
and
any
13
other
similar
insurance
or
guaranty
owned
by
the
judgment
14
creditor
relating
to
the
affected
property.
Except
for
a
sale
15
that
is
subject
to
redemption,
an
assignment
under
this
section
16
shall
bar
junior
interests
in
the
property
as
if
an
assignment
17
had
not
been
elected.
If
the
sale
is
subject
to
redemption,
18
the
period
to
redeem
shall
commence
on
the
date
of
the
sale
19
resulting
in
the
assignment.
20
EXPLANATION
21
This
bill
relates
to
the
foreclosure
of
a
real
estate
22
mortgage.
23
Current
law
relating
to
foreclosure
with
redemption
provides
24
a
statutory
right
of
redemption
to
the
debtor
of
the
foreclosed
25
property
which
allows
the
debtor
to
reclaim
the
debtor’s
26
foreclosed
property
by
making
payment
in
full
of
the
unpaid
27
loan
plus
costs
(Code
section
628.3).
This
right
of
redemption
28
also
applies
to
creditors,
under
some
circumstances,
if
the
29
debtor
does
not
exercise
the
debtor’s
right
to
redeem
(Code
30
sections
628.5
and
628.8).
Once
the
redemption
period
expires
31
(generally,
one
year
from
the
day
of
the
sale)
without
a
32
party
redeeming
the
property,
the
purchaser
is
entitled
to
a
33
sheriff’s
deed
which
conveys
title
only
as
it
existed
when
the
34
mortgage
was
executed.
35
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2
S.F.
_____
This
bill
allows
a
successful
bidder
at
a
sheriff’s
sale
1
who
is
not
affiliated
with
the
judgment
creditor
to
elect
to
2
receive,
in
lieu
of
a
sheriff’s
deed
or
sheriff’s
certificate
3
of
sale,
an
assignment
of
all
of
the
judgment
creditor’s
4
interest
in
the
judgment,
the
underlying
indebtedness,
and
any
5
policies
of
title,
property,
and
any
other
similar
insurance
6
or
guaranty
owned
by
the
judgment
creditor
relating
to
the
7
affected
property.
Except
for
a
sale
that
is
subject
to
8
redemption,
an
assignment
under
the
bill
bars
junior
interests
9
in
the
property
as
if
an
assignment
had
not
been
elected.
If
10
the
sale
is
subject
to
redemption,
the
period
to
redeem
begins
11
on
the
date
of
the
sale
resulting
in
the
assignment.
12
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(3)
84
rh/sc
2/
2