H.F. 2234 Section 1. Section 535.8, subsection 4, paragraph e, 1 subparagraph (1), Code 2018, is amended to read as follows: 2 (1) Notwithstanding section 628.3 when a foreclosure of a 3 mortgage on real property results from the enforcement of a 4 due-on-sale clause, the mortgagor may redeem the real property 5 at any time within three years eighteen months from the day of 6 sale under the levy, and the mortgagor shall, in the meantime, 7 be entitled to the possession thereof; and for the first 8 thirty fifteen months thereafter such right of redemption is 9 exclusive. Any real property redeemed by the debtor shall 10 thereafter be free and clear from any liability for any unpaid 11 portion of the judgment under which the real property was 12 sold. The right of redemption established by this paragraph 13 is not subject to waiver by the mortgagor and the period of 14 redemption established by this paragraph shall not be reduced. 15 The times for redemption by creditors provided in sections 16 628.5 , 628.15 , and 628.16 shall be extended to thirty-three 17 sixteen months in any case in which the mortgagor’s period 18 for redemption is extended by this paragraph. This paragraph 19 does not apply to foreclosure of a mortgage if for any reason 20 other than enforcement of a due-on-sale clause. As used in 21 this paragraph, “due-on-sale clause” means any type of covenant 22 which gives the mortgagee the right to demand payment of the 23 outstanding balance or a major part thereof upon a transfer by 24 the mortgagor to a third party of an interest of the mortgagor 25 in property covered by the mortgage. This paragraph applies to 26 any foreclosure occurring on or after May 10, 1980. However, 27 this paragraph does not apply if the lender establishes, based 28 on reasonable criteria which are not more restrictive than 29 those used to evaluate new mortgage-loan applications, that the 30 security interest or the likelihood of repayment is impaired as 31 a result of the transfer of interest. 32 Sec. 2. Section 628.3, Code 2018, is amended to read as 33 follows: 34 628.3 Redemption by debtor. 35 -1- LSB 5056HV (1) 87 asf/rj 1/ 5

H.F. 2234 The debtor may redeem real property at any time within 1 one year six months from the day of sale, and will, in the 2 meantime, be entitled to the possession thereof; and for the 3 first six three months thereafter such right of redemption is 4 exclusive. Any real property redeemed by the debtor shall 5 thereafter be free and clear from any liability for any unpaid 6 portion of the judgment under which said real property was 7 sold. 8 Sec. 3. Section 628.5, Code 2018, is amended to read as 9 follows: 10 628.5 Redemption by creditors. 11 If no redemption is made by the debtor as above provided, 12 thereafter, and at any time within nine four months from the 13 day of sale, said redemption may be made by a mortgagee before 14 or after the debt secured by the mortgage falls due, or by any 15 creditor whose claim becomes a lien prior to the expiration of 16 the time allowed for such redemption. 17 Sec. 4. Section 628.15, Code 2018, is amended to read as 18 follows: 19 628.15 After nine Creditors after four months. 20 After the expiration of nine four months from the day of 21 sale, the creditors can no longer redeem from each other, 22 except as hereinafter provided. 23 Sec. 5. Section 628.16, Code 2018, is amended to read as 24 follows: 25 628.16 Who gets property. 26 Unless the defendant redeems, the purchaser, or the creditor 27 who has last redeemed prior to the expiration of the nine 28 within four months aforesaid from the day of sale , will hold 29 the property absolutely. 30 Sec. 6. Section 628.26, Code 2018, is amended to read as 31 follows: 32 628.26 Agreement to reduce period of redemption. 33 The mortgagor and the mortgagee of real property consisting 34 of less than ten acres in size may agree and provide in the 35 -2- LSB 5056HV (1) 87 asf/rj 2/ 5

H.F. 2234 mortgage instrument that the period of redemption after sale 1 on foreclosure of said mortgage as set forth in section 628.3 2 be reduced to six three months, provided the mortgagee waives 3 in the foreclosure action any rights to a deficiency judgment 4 against the mortgagor which might arise out of the foreclosure 5 proceedings. In such event the debtor will, in the meantime, 6 be entitled to the possession of said real property; and if 7 such redemption period is so reduced, for the first three 8 months month after sale such right of redemption shall be 9 exclusive to the debtor, and the time periods in sections 10 628.5 , 628.15 , and 628.16 , shall be reduced to four two months. 11 Sec. 7. Section 654.20, subsection 1, Code 2018, is amended 12 to read as follows: 13 1. If the mortgaged property is not used for an agricultural 14 purpose as defined in section 535.13 , the plaintiff in an 15 action to foreclose a real estate mortgage may include in the 16 petition an election for foreclosure without redemption. The 17 election is effective only if the first page of the petition 18 contains the following notice in capital letters of the same 19 type or print size as the rest of the petition: 20 NOTICE 21 THE PLAINTIFF HAS ELECTED FORECLOSURE WITHOUT REDEMPTION. 22 THIS MEANS THAT THE SALE OF THE MORTGAGED PROPERTY WILL OCCUR 23 PROMPTLY AFTER ENTRY OF JUDGMENT UNLESS YOU FILE WITH THE COURT 24 A WRITTEN DEMAND TO DELAY THE SALE. IF YOU FILE A WRITTEN 25 DEMAND, THE SALE WILL BE DELAYED UNTIL TWELVE SIX MONTHS 26 (or SIX THREE MONTHS if the petition includes a waiver of 27 deficiency judgment) FROM ENTRY OF JUDGMENT IF THE MORTGAGED 28 PROPERTY IS YOUR RESIDENCE AND IS A ONE-FAMILY OR TWO-FAMILY 29 DWELLING OR UNTIL TWO MONTHS FROM ENTRY OF JUDGMENT IF THE 30 MORTGAGED PROPERTY IS NOT YOUR RESIDENCE OR IS YOUR RESIDENCE 31 BUT NOT A ONE-FAMILY OR TWO-FAMILY DWELLING. YOU WILL HAVE 32 NO RIGHT OF REDEMPTION AFTER THE SALE. THE PURCHASER AT THE 33 SALE WILL BE ENTITLED TO IMMEDIATE POSSESSION OF THE MORTGAGED 34 PROPERTY. YOU MAY PURCHASE AT THE SALE. 35 -3- LSB 5056HV (1) 87 asf/rj 3/ 5

H.F. 2234 Sec. 8. Section 654.21, Code 2018, is amended to read as 1 follows: 2 654.21 Demand for delay of sale. 3 At any time prior to entry of judgment, the mortgagor may 4 file a demand for delay of sale. If the demand is filed, the 5 sale shall be held promptly after the expiration of two months 6 from entry of judgment. However, if the demand is filed and 7 the mortgaged property is the residence of the mortgagor and 8 is a one-family or two-family dwelling, the sale shall be held 9 promptly after the expiration of twelve six months, or six 10 three months if the petition includes a waiver of deficiency 11 judgment, from entry of judgment. If the demand is filed, the 12 mortgagor and mortgagee subsequently may file a stipulation 13 that the sale may be held promptly after the stipulation is 14 filed and that the mortgagee waives the right to entry of a 15 deficiency judgment. If the stipulation is filed, the sale 16 shall be held promptly after the filing. At any time prior 17 to judgment, the mortgagor may pay the plaintiff the amount 18 claimed in the petition and, if paid, the foreclosure action 19 shall be dismissed. At any time after judgment and before 20 the sale, the mortgagor may pay the plaintiff the amount of 21 the judgment and, if paid, the judgment shall be satisfied of 22 record and the sale shall not be held. 23 EXPLANATION 24 The inclusion of this explanation does not constitute agreement with 25 the explanation’s substance by the members of the general assembly. 26 This bill shortens the periods of time associated with 27 redemption of real property from foreclosure in Code chapter 28 628. It changes the period of time that a defendant-debtor may 29 redeem real property from within one year of sale to within 30 six months of sale. It also changes the period in which the 31 defendant-debtor has the exclusive right of redemption from six 32 months after sale to three months after sale. The period of 33 redemption by creditors is reduced from nine months after sale 34 to four months after sale. After those four months, creditors 35 -4- LSB 5056HV (1) 87 asf/rj 4/ 5

H.F. 2234 cannot redeem from each other. Unless the defendant-debtor 1 redeems, the purchaser, or the creditor who last redeemed 2 within four months of the day of sale, will hold the property 3 absolutely. 4 Under current law, a mortgagor and mortgagee can agree to 5 reduce the period of redemption from foreclosure as described 6 in the mortgage instrument to a period of six months. The bill 7 would allow the mortgagor and mortgagee to agree to reduce 8 the period of redemption by the debtor to three months. The 9 debtor’s right of redemption would be exclusive the first 10 month, as opposed to three months. Under the bill, the time 11 for redemption by creditors would be shortened from four months 12 to two months. 13 The bill also alters Code chapter 654. The bill changes 14 the notice requirement and rule for foreclosure without 15 redemption by changing the length of time a sale can be 16 delayed when a defendant-mortgagor makes a written demand to a 17 plaintiff-mortgagee to delay sale. The bill delays the sale by 18 six months from entry of judgment as opposed to the current 12 19 months. If a plaintiff-mortgagee’s petition includes a waiver 20 of deficiency judgment, a defendant-mortgagor’s written demand 21 will only result in a three-month rather than a six-month delay 22 of sale following entry of judgment. 23 Notwithstanding Code section 628.3 when a foreclosure of 24 a mortgage on real property results from enforcement of a 25 due-on-sale clause, the bill amends Code section 535.8(4)(e)(1) 26 to shorten the period that a mortgagor may redeem the real 27 property from any time within three years to anytime within 28 18 months from the day of sale under the levy. The bill also 29 shortens the period during which the mortgagor’s right of 30 redemption is exclusive from the first 30 months to the first 31 15 months and the period during which creditors may redeem 32 under Code sections 628.5, 628.15, and 628.16 from 33 months 33 to 16 months. 34 -5- LSB 5056HV (1) 87 asf/rj 5/ 5