Judicial Mortgage Foreclosures

Although Iowa law permits voluntary, non-judicial foreclosures, the overwhelming majority of foreclosures take place through the judicial system. This entails the filing of a lawsuit wherein the homeowner will be given an opportunity to respond.The response time for the homeowner is usually twenty (20) days from the date of service. Thus, if you are served with foreclosure papers, you should contact your attorney as soon as possible.In addition to filing an Answer to the Foreclosure Petition, our office usually files a Demand for Delay of Sale. Although situations vary, this is generally the best way to slow down the foreclosure process. Once that is done, the homeowner can evaluate what is in his or her best interest.Sometimes the homeowner just needs time to catch up on delinquent payments and make arrangements for doing so through the loss mitigation department of the lender. In other cases, the homeowner may seek to avoid personal liability on the foreclosure judgment while remaining in the house "rent free" throughout the foreclosure process. In many cases, this will be as much as an entire year or more.Industry experts project that over 8 million foreclosures are expected in the next four years. This amounts to 16% of all mortgages and 59% of all sub prime mortgages in the United States.While bankruptcy has not proven to be a very effective tool in combating the foreclosure crisis, changes have been proposed in Congress that would allow bankruptcy judges to restructure mortgages and reduce a borrower's payments. This is sometimes described as a mortgage "cram down". We will continue to monitor any such changes in the law.