Bill Text: IA HF2234 | 2017-2018 | 87th General Assembly | Enrolled

Iowa House Bill 2234 (Prior Session Legislation)

Bill Title: A bill for an act relating to shortening the periods of time for redeeming real property from foreclosure and delaying sale of foreclosed property and relating to the statute of limitations period for executing judgments on claims for rent. (Formerly HSB 531.) Effective 7-1-18.

Spectrum: Committee Bill

Status: (Passed) 2018-05-16 - Signed by Governor. H.J. 997. [HF2234 Detail]

Download: Iowa-2017-HF2234-Enrolled.html

House File 2234 - Enrolled

HOUSE FILE
BY COMMITTEE ON COMMERCE

(SUCCESSOR TO HSB 531)
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A BILL FOR
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House File 2234

AN ACT
RELATING TO SHORTENING THE PERIODS OF TIME FOR
REDEEMING REAL PROPERTY FROM FORECLOSURE AND DELAYING
SALE OF FORECLOSED PROPERTY AND RELATING TO THE STATUTE OF
LIMITATIONS PERIOD FOR EXECUTING JUDGMENTS ON CLAIMS FOR
RENT.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
Section 1. Section 535.8, subsection 4, paragraph e,
subparagraph (1), Code 2018, is amended to read as follows:
(1) Notwithstanding section 628.3 when a foreclosure of a
mortgage on real property results from the enforcement of a
due=on=sale clause, the mortgagor may redeem the real property
at any time within three years eighteen months from the day of
sale under the levy, and the mortgagor shall, in the meantime,
be entitled to the possession thereof; and for the first
thirty fifteen months thereafter such right of redemption is
exclusive. Any real property redeemed by the debtor shall
thereafter be free and clear from any liability for any unpaid
portion of the judgment under which the real property was
sold. The right of redemption established by this paragraph
is not subject to waiver by the mortgagor and the period of
redemption established by this paragraph shall not be reduced.
The times for redemption by creditors provided in sections
628.5, 628.15, and 628.16 shall be extended to thirty=three
sixteen months in any case in which the mortgagor's period
for redemption is extended by this paragraph. This paragraph
does not apply to foreclosure of a mortgage if for any reason
other than enforcement of a due=on=sale clause. As used in
this paragraph, "due=on=sale clause" means any type of covenant
which gives the mortgagee the right to demand payment of the
outstanding balance or a major part thereof upon a transfer by
the mortgagor to a third party of an interest of the mortgagor
in property covered by the mortgage. This paragraph applies to
any foreclosure occurring on or after May 10, 1980. However,
this paragraph does not apply if the lender establishes, based
on reasonable criteria which are not more restrictive than
those used to evaluate new mortgage=loan applications, that the
security interest or the likelihood of repayment is impaired as
a result of the transfer of interest.
Sec. 2. Section 615.1A, Code 2018, is amended to read as
follows:
615.1A Execution on judgment ==== claim for rent.
After the expiration of a period of five ten years from the
date of entry of judgment of a court not of record, or twenty
years from the date of entry of judgment of a court of record,
in an action on a claim for rent, exclusive of any time during
which execution on the judgment was stayed pending a bankruptcy
action or order of court, such judgment shall be null and void,
all liens shall be extinguished, and no execution shall be
issued. However, in the event that the judgment or the right
to collect thereon is sold or otherwise assigned for value to
a third party other than a state or federally chartered bank
or credit union, such judgment shall be null and void, all
liens shall be extinguished, and no execution shall be issued
after the expiration of two years from the date of entry of the
judgment, exclusive of any time during which execution on the
judgment was stayed pending a bankruptcy action or order of
court.
Sec. 3. Section 628.26, Code 2018, is amended to read as
follows:
628.26 Agreement to reduce period of redemption.
The mortgagor and the mortgagee of real property consisting
of less than ten acres in size may agree and provide in the
mortgage instrument that the period of redemption after sale
on foreclosure of said mortgage as set forth in section 628.3
be reduced to six months, or reduced to three months if the
property is not used for an agricultural purpose as defined in
section 535.13, provided in all cases under this section that
the mortgagee waives in the foreclosure action any rights to
a deficiency judgment against the mortgagor which might arise
out of the foreclosure proceedings. In such event the debtor
will, in the meantime, be entitled to the possession of said
real property; and if such redemption period is so reduced, for
the first three two months after sale such right of redemption
shall be exclusive to the debtor, and the time periods in
sections 628.5, 628.15, and 628.16, shall be reduced to four
three months.
Sec. 4. Section 654.20, subsection 1, Code 2018, is amended
to read as follows:
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:
NOTICE
THE PLAINTIFF HAS ELECTED FORECLOSURE WITHOUT REDEMPTION.
THIS MEANS THAT THE SALE OF THE MORTGAGED PROPERTY WILL OCCUR
PROMPTLY AFTER ENTRY OF JUDGMENT UNLESS YOU FILE WITH THE COURT
A WRITTEN DEMAND TO DELAY THE SALE. IF YOU FILE A WRITTEN
DEMAND, THE SALE WILL BE DELAYED UNTIL TWELVE SIX MONTHS
(or SIX THREE MONTHS if the petition includes a waiver of
deficiency judgment) FROM ENTRY OF JUDGMENT IF THE MORTGAGED
PROPERTY IS YOUR RESIDENCE AND IS A ONE=FAMILY OR TWO=FAMILY
DWELLING OR UNTIL TWO MONTHS FROM ENTRY OF JUDGMENT IF THE
MORTGAGED PROPERTY IS NOT YOUR RESIDENCE OR IS YOUR RESIDENCE
BUT NOT A ONE=FAMILY OR TWO=FAMILY DWELLING. YOU WILL HAVE
NO RIGHT OF REDEMPTION AFTER THE SALE. THE PURCHASER AT THE
SALE WILL BE ENTITLED TO IMMEDIATE POSSESSION OF THE MORTGAGED
PROPERTY. YOU MAY PURCHASE AT THE SALE.
Sec. 5. Section 654.21, Code 2018, is amended to read as
follows:
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 twelve six months, or six
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.

LINDA UPMEYER

CHARLES SCHNEIDE

CARMINE BOAL

KIM REYNOLDS

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