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American College of Mortgage Attorneys — Partner with the Best®

Formed in 1974, the American College of Mortgage Attorneys (ACMA) is comprised of over 500 lawyers in North America who are experts in mortgage law.

United States

Iowa

The security instrument used in Iowa is the mortgage. Deeds of trust, though rarely used, are considered as, and foreclosed like, mortgages. Iowa Code &sect;&nbsp;654.2 (2023).

SECURITY INSTRUMENT USED

Mortgages must be in writing but need not be witnessed. A statutory form of conveyance for a mortgage is available but not required. Iowa Code &sect;&nbsp;558.19(4) (2023). In order to be valid against subsequent purchasers, the mortgage must be properly acknowledged and recorded. Iowa Code &sect;&sect;&nbsp;558.41-.42 (2023). Recorded documents shall consist of 1 or more individual pages sufficiently legible to produce a clear reproduction. All preprinted text shall be at least 8 point in size and no more than 20 characters and spaces per inch. All other text typed or computer generated shall be at least 10 point in size and no more than 16 characters and spaces per inch. Each document shall be on white paper of not less than 20-pound weight without watermarks or other visible inclusions. All signatures shall be in black or dark blue ink, with the corresponding name typed, printed, or stamped beneath the original signature in such a manner that does not cover or otherwise materially interfere with any part of the document. The first page of each document shall have a top margin of at least 3” of vertical space, with all other margins at least &frac34;”. Nonessential information, such as page numbers, may be placed in a margin, except the top margin. Iowa Code &sect; 331.606B (2023). Each document shall contain the following information on the first page below the 3” margin: (1)&nbsp;the name, address, and telephone number of the individual who prepared the document; (2)&nbsp;the taxpayer's name and a complete mailing address for any document or instrument of conveyance; (3)&nbsp;a return address; (4)&nbsp;the title of the document or instrument; (5)&nbsp;all grantors' names; (6)&nbsp;all grantees' names; (7)&nbsp;any address required by statute; (8)&nbsp;the property's legal description and parcel identification number, if required; and (9)&nbsp;a document or instrument number for statutory requirements, if applicable. If insufficient space exists on the first page for all such information, the page reference of the document or instrument where the information is located may be noted on the first page. It is common practice in Iowa to use a cover page to set forth the required information, but a cover page is not required. Iowa Code &sect; 331.606B (2023). Except as specifically exempted in &sect;&nbsp;331.606B(5), (a)&nbsp;a document or instrument dated on or after July 1, 2005, that does not conform to the format standards specified in &sect;&nbsp;331.606B(1)-(3) cannot be accepted for recording except upon payment of an additional recording fee of $10 per document or instrument, and (b)&nbsp;a document or instrument dated on or after July 1, 2009, that does not conform to the format standards specified in &sect;&nbsp;331.606B(1), paragraphs “c” and “e”, or &sect;&nbsp;331.606B(2), paragraph “b”, shall not be accepted for recording. The following types of documents are exempt from the format standards: (1)&nbsp;a document or instrument that was signed before July 1, 2005; (2)&nbsp;a military separation document or instrument; (3)&nbsp;a document or instrument executed outside the United States; (4)&nbsp;a certified copy of a document or instrument issued by a governmental agency, including a vital record; (5)&nbsp;a document or instrument where 1 of the original parties is deceased or otherwise incapacitated; (6)&nbsp;a document or instrument formatted to meet court requirements; (7)&nbsp;a federal tax lien; (8)&nbsp;a UCC filing; and (9) a groundwater hazard statement. Iowa Code &sect;&nbsp;331.606B (5) (2023).

RECORDING REQUIREMENTS

Any transfer of an interest in real estate situated in Iowa by an Iowa limited liability company, or foreign limited liability company authorized to conduct business in Iowa, may be effectuated only (1)&nbsp;as provided in the company's operating agreement or, if the operating agreement does not so provide, only with the consent of all the company's members (in the case of a member-managed LLC) or a majority of the company's managers (in the case of a manager-managed LLC), or (2)&nbsp;as provided in the company's statement of authority filed with the Iowa Secretary of State and the recorder of the county in which the real estate is located. Iowa Code &sect;&nbsp;489.407A(2)-(3) (2023).

MORTGAGES BY LIMITED LIABILITY COMPANIES

Waiver of mediation (agricultural land only). Iowa Code &sect;&nbsp;654A.6(2) (2023). Homestead exemption waiver as to agricultural land greater than 40 acres or buildings located on said land. Iowa Code &sect;&nbsp;561.22 (2023). The Iowa code contains model language for a waiver of the homestead exemption for agricultural land in a contract. Iowa Code &sect; 561.22 (2023). The waiver language must be in bold face type and at least 10 point in size. Id. The model language contained in the statute is: I understand that homestead property is in many cases protected from the claims of creditors and exempt from judicial sale; and that by signing this contract, I voluntarily give up my right to this protection for this property with respect to claims based upon this contract. Iowa Code &sect; 561.22 (2023). As to property less than 10 acres, mortgagor may agree in mortgage to reduce statutory redemption period to 6 months (or 3 months if the property is not used for an agricultural purpose) upon agreement of mortgagee to a waiver of deficiency judgment. Iowa Code &sect;&nbsp;628.26 (2023).

STATUTES TO BE WAIVED

Prepayment penalties are prohibited in mortgages on residential property (single-family or 2-family dwellings) occupied or to be occupied by the borrower, as well as in mortgages on agricultural land securing loans with a term of 5 years or less. Iowa Code &sect;&nbsp;535.9 (2023).

UNUSUAL TREATMENT OF STANDARD PROVISIONS

If a prior recorded mortgage contains the statutory form of notice set forth in Iowa Code &sect;&nbsp;654.12A (2023) and identifies the maximum credit available, then loans and advances under that mortgage are senior to indebtedness to other creditors under subsequently recorded mortgages. However, this priority is not applicable to loans or advances made after receipt of a notice of foreclosure on the subsequent mortgage. Iowa Code &sect;&nbsp;654.12A (2023).

SECURING FUTURE ADVANCES

In order to protect additional advances, a lienholder must file a verified statement of the expenditures with the clerk of court. Iowa Code &sect;&nbsp;629.1 (2023). These amounts then become part of the redemption price. Iowa Code &sect;&nbsp;629.2 (2023). The amount, plus interest, is added to the original lien and has the same priority. Iowa Code &sect;&nbsp;629.4 (2023). The additional advances covered include payment of delinquency of taxes or special assessments, insurance premiums, money for necessary repairs, maintenance or preservation of property, interest on a senior lien, and sums to cure a breach of a condition of a senior encumbrance. Iowa Code &sect; 629.1 (2023).

SECURING ADDITIONAL ADVANCES TO PROTECT THE COLLATERAL

The lien created by a recorded purchase money mortgage has priority over judgments against a purchaser and other interests arising by, through or under the purchaser. Iowa Code &sect;&nbsp;654.12B(1) (2023). A mortgage is a “purchase money mortgage” if it is either taken or retained by the seller of the real estate to secure all or part of its price, or is taken by a lender providing funds to enable the purchaser to acquire rights in the real estate. Iowa Code &sect;&nbsp;654.12B(1) (2023). The mortgage must contain a recital that it is a purchase money mortgage. Iowa Code &sect;&nbsp;654.12B(2) (2023). However, failure to contain this recital shall not prevent a mortgage otherwise qualifying from being a purchase money mortgage for purposes other than this section. Iowa Code &sect;&nbsp;654.12B(2) (2023). The rights in this section are in addition to, and the obligations are not in derogation of, all rights provided by common law. Iowa Code &sect;&nbsp;654.12B(2) (2023).

PURCHASE MONEY MORTGAGE LIEN

No restrictions, but a deed of trust is rarely used.

CORPORATE OR INDIVIDUAL

RESIDENCY REQUIRED

BRIEF DESCRIPTION OF PROCEDURE

(See Iowa Code &sect; 654 (2023)):

JUDICIAL PROCEDURE

If the property is a 1- or 2-family dwelling and is the mortgagor's residence, a written notice of default and right to cure is required. Iowa Code &sect;&nbsp;654.2D (2023). A written notice of default and right to cure is also required if the property is agricultural land. Iowa Code &sect;&nbsp;654.2A(2) (2023). After the notice is given, the borrower has 30 days to cure the default, in the case of a homestead, or 45 days, in the case of agricultural land. 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 14-day demand for payment of the accelerated balance to qualify for an award of attorney fees under section 625.25 on the accelerated balance. Id. at &sect;&nbsp;654.4B. Before initiating a foreclosure action on homestead property, the creditor shall provide the owner with notice of the availability of counseling and mediation. Iowa Code &sect;&nbsp;654.4B (2023). Before any foreclosure proceedings are filed on agricultural land, a release must be obtained from the farm mediation service or a court order obtained, after notice and hearing, that the time delay for mediation would cause the creditor irreparable harm. Iowa Code &sect;&nbsp;654A.6(1) (2023). The period for a request for mediation shall run concurrently with the period for notice of right to cure. Id.

PRE-FORECLOSURE PROCEDURES

File petition and application for a receiver (20 days to file an answer). If attorney fees will be sought, this must be included in the petition. Iowa Code &sect;&nbsp;625.25 (2023). On homestead property, borrower has 30-day right to cure. Iowa Code &sect;&nbsp;654.2D(3) (2023). On agricultural land, borrower has 45 -day right to cure. Iowa Code &sect;&nbsp;654.2A(4) (2023). Before initiating foreclosure action, creditor shall give borrower notice of default and right to cure. Id. Notice of a right to cure must: be in writing, state the name, address, and telephone number of the creditor or other person to which payment is to be made, identify the obligation secured, state the nature of the right to cure the default, state the nature of the alleged default, state the total payment, (including an itemization of any delinquency or deferral charges), identify the date by which the amount must be paid, and include a statement that if the default is not cured the creditor is entitled to proceed with foreclosure. Iowa Code &sect; 654.2B (2023).

JUDICIAL FORECLOSURE PROCESS

<ul>
 <li>file notice of default and right to cure (if necessary) (30-45 days to cure)</li>
 <li>give borrower 14-day demand for payment of the accelerated balance of the mortgage to qualify for an award of attorney's fees</li>
 <li>file petition and application for a receiver</li>
 <li>answer (20 days to file an answer)</li>
 <li>hearing on the receiver (25 days)</li>
 <li>motion for summary judgment (20 to 30 days)</li>
 <li>hearing on the motion for summary judgment (30 to 60 days)</li>
 <li>ruling on the motion for summary judgment (60 to 90 days)</li>
 <li>trial would occur approximately 6 months after filing</li>
 <li>execution for sheriff's sale (30 days after trial or of granting of motion for summary judgment)</li>
 <li>redemption period (if applicable) (see below)</li>
 <li>receipt of sheriff's deed after sheriff's sale or upon expiration of redemption</li>
</ul> &nbsp;

TYPICAL LENGTH OF PROCEDURE

(See Iowa Code &sect;&nbsp;654.18 (2023)):&nbsp; Voluntary agreement entered into between the parties to surrender the property and waive deficiency. Agreement recorded in the county where real estate is located. Junior lienholders and parties in possession served notice by certified mail (30 days from mailing to redeem or process is complete). Iowa Code &sect; 654.18(1)(e) (2023). Nonjudicial foreclosure also may be effected without a voluntary agreement by notice served on mortgagor and junior lienholders, subject to rejection by mortgagor or cure by either mortgagor or a junior lienholder. See Iowa Code ch. 655A (2023).&nbsp; This procedure does not apply to real estate used for an agricultural purpose or to a one or two family dwelling which is, at the time of the initiation of the foreclosure, occupied by a legal or equitable titleholder.&nbsp; Iowa Code &sect;&nbsp;655A.9.

NONJUDICIAL PROCEDURE

If the estate in question is less than a leasehold having 2 years of an unexpired term, the sale is absolute. Otherwise, the property is redeemable. Iowa Code &sect;&nbsp;628.2 (2023). Generally, the debtor may redeem the property within 1 year of the sale. Iowa Code &sect;&nbsp;628.3 (2023). For the first 6 months after the date of sale the right of redemption is exclusive. Iowa Code &sect; 628.3 (2023). If the property is not used for agricultural or certain residential purposes, the period of redemption is 180 days. If deficiency judgment is waived, the period is 90 days. Iowa Code &sect;&nbsp;628.28(1) (2023). For the first 90 days the right of redemption is exclusive. Iowa Code &sect; 628.28(1) (2023). If a deficiency judgment has been waived the redemption period is reduced to 90 days and the exclusive period of redemption is reduced to 30 days. Iowa Code &sect; 628.28(1) (2023). If the property has been foreclosed nonjudicially pursuant to Iowa Code &sect;&nbsp;654.18(1) (2023), the junior lienholder's redemption period is 30 days. Iowa Code &sect; 654.18(1)(e) (2023). The price is the amount of the debt secured by the mortgage plus any protective advances. Iowa Code &sect;&nbsp;628.29 (2023). There is no redemption period following a nonjudicial foreclosure pursuant to Iowa Code ch.&nbsp;655A (2023). The terms of redemption, when made by a creditor, are the amount bid or paid by the holder of the certificate, including all costs, with interest the same as the lien redeemed from bears on the amount of such bid or payment. Iowa Code &sect;&nbsp;628.11 (2023). The terms of redemption, when made by the titleholder, are the amount of the certificate, all sums paid by the holder thereof in effecting redemptions, and the amount of the holder's own lien (or the amount the holder has credited) if less than the whole. This sum is with interest. The titleholder may also redeem by presenting to the clerk of the district court the certificate of sale properly assigned to the titleholder. Iowa Code &sect;&nbsp;628.13 (2023).

REDEMPTION PERIOD AND PRICE

If the mortgaged property is not used for agricultural purposes, the plaintiff may include in the foreclosure petition an election for foreclosure without redemption, but sale may be delayed. Iowa Code &sect;&nbsp;654.20 (2023). If the property is agricultural land, after the filing of the foreclosure petition, the parties may agree to extend the redemption period up to 5 years. Iowa Code &sect;&nbsp;628.26A (2023). If the property is less than 10 acres, the parties may agree and provide in the mortgage that the redemption period be reduced to 6 months (or 3 months if the property is not used for agricultural purposes) in exchange for agreement of mortgagee to waive any rights to a deficiency judgment. Iowa Code &sect;&nbsp;628.26 (2023). The parties may agree and provide in the mortgage of any tract of real property that if such property is abandoned, and a deficiency judgment is waived, the period of redemption may be reduced to 60 days. Iowa Code &sect;&nbsp;628.27 (2023).

WAIVER OF REDEMPTION; REDUCTION OF REDEMPTION PERIOD

If the property does not sell for an amount sufficient to satisfy the execution, a general execution may be issued against the mortgagor, unless the parties agree otherwise. Iowa Code &sect;&nbsp;654.6 (2023). If the plaintiff elected foreclosure without redemption (see above), the plaintiff may also include in the petition a waiver of deficiency judgment. Iowa Code &sect;&nbsp;654.26 (2023).

DEFICIENCIES

Tenants' rights under leases inferior to mortgage will be terminated by foreclosure action; otherwise, mortgage is foreclosed subject to tenants' rights under prior leases.

EFFECT OF FORECLOSURE UPON LEASES

When disposing of agricultural real estate acquired by foreclosure the previous owner must be given an opportunity to purchase the property. Notice requirements are necessary at the time of recording the Sheriff's deed and at the time the property is sold. Iowa Code &sect;&nbsp;654.16A (2023).

RIGHT OF FIRST REFUSAL TO REPURCHASE AGRICULTURAL LAND

There is a maximum statutory rate of interest, which is 5% per annum on certain enumerated cases found at Iowa Code &sect;&nbsp;535.2(1) (2023). However, this maximum statutory rate of interest shall not apply if the parties agree in writing for the payment of interest at a rate that is not greater than a rate permitted by Iowa Code &sect;&nbsp;535.2(3). Iowa Code &sect; 535.2(1) (2023). Section 535.2(3)(a) states that the maximum lawful rate of interest that may be provided for in any written agreement for the payment of interest entered into during any calendar month commencing on or after April&nbsp;13, 1979, shall be 2 percentage points above the monthly average 10-year constant maturity interest rate of the United States Government notes and bonds as published by the Board of Governors of the Federal Reserve System for the calendar month second preceding the month during which the maximum rate based thereon will be effective, rounded to the nearest &frac14; of 1% per year. Iowa Code &sect;&nbsp;535.2(3)(a) (2023). The Superintendent of Banking on or before the twentieth day of each month determines the maximum lawful rate of interest for the following calendar month, and this maximum lawful rate of interest shall be effective on the first day of the calendar month following publication. Iowa Code &sect;&nbsp;535.2(3)(a) (2023). Iowa has opted out of the federal usury preemption under &sect;&nbsp;501 of the Depository Institutions Deregulation and Monetary Control Act of 1980. 1980 Iowa Acts 1156 &sect;&nbsp;32.

USURY CEILING

There are a number of transactions that are exempted from the Iowa usury statute, including most commercial transactions.&nbsp; Persons who are not protected by the usury statute setting the maximum lawful rate of interest under Iowa Code &sect;&nbsp;535.2 (2023) include: <ul>
 <li>A person borrowing money for the purpose of acquiring real property or refinancing a contract for deed.</li>
 <li>A person borrowing money or obtaining credit in an amount that exceeds $25,000, exclusive of interest, for the purpose of constructing improvements on real property, whether or not the real property is owned by the person.</li>
 <li>A vendee under a contract for deed to real property.</li>
 <li>A domestic or foreign corporation, and a real estate investment trust, as defined in Section&nbsp;856 of the Internal Revenue Code, and a person purchasing securities on credit from a broker or dealer registered or licensed under Iowa Statute or under the Securities Exchange Act of 1934, 15 U.S.C., Ch. 78A, as amended.</li>
 <li>A person borrowing money or obtaining credit for business or agricultural purposes, or a person borrowing money or obtaining credit in an amount that exceeds the threshold amount, as determined by 12 C.F.R. &sect; 1026.3(b) for personal, family, or household purposes.</li>
</ul> Iowa Code &sect;&nbsp;535.2(2)(a)(1)-(5) (2023).

USURY EXCEPTIONS

With respect to owner-occupied 1- or 2-family residential property, a loan origination or processing fee cannot be greater than 2% of the loan principal. Iowa Code &sect;&nbsp;535.8(4)(a) (2023).

LIMITATION ON LOAN CHARGES

Iowa adopted Revised Article 9 of the Uniform Commercial Code, effective as of July&nbsp;1, 2001, for identifying the proper financing statement filing locations for each collateral classification. Financing statements filed to perfect security interests in fixtures are filed with the county where the related real property is located. Iowa Code &sect;&nbsp;554.9501(1) (2023).

LOCATIONS FOR FILING

A mortgage is effective as a financing statement filed as a fixture filing. Iowa Code &sect;&nbsp;554.9502(3) (2023).

SECURITY INSTRUMENT AS FIXTURE FILING

When any person bound as surety for another for the payment of money, or the performance of any other contract in writing, apprehends that the principal is about to become insolvent or remove permanently from the State without discharging the contract, the surety may, if a cause of action has accrued, by writing, require the creditor sue upon the same, or permit the surety to commence an action in the name of such creditor and at the cost of the surety. Iowa Code &sect;&nbsp;540.1 (2023). If a creditor refuses or neglects to bring an action against borrower within 10 days after a request by the surety, and does not permit the surety to do so, and to furnish original documents to the surety, the surety shall be discharged. Iowa Code &sect;&nbsp;540.2 (2023).

UNUSUAL PROVISIONS OR REQUIREMENTS

No specific Iowa suretyship statutes need to be waived.

The notice requirement from a surety to a creditor to begin against the principal must be in writing. Iowa Code &sect;&nbsp;540.1 (2023).

SPECIAL PROBLEMS IN ENFORCEMENT

There is a 2-year statute of limitation period for enforcement of or execution on a judgment obtained in the foreclosure of (1)&nbsp;a real estate mortgage, deed of trust, or real estate contract (executed prior to July 1, 2009) upon property that, at the time the foreclosure is commenced is either used for agricultural purposes or as a 1- or 2-family dwelling that is the mortgagor's residence, or (2)&nbsp;a real estate mortgage, deed of trust, or real estate contract (executed after July 1, 2009) upon property that, at the time of the execution of the mortgage, deed, or contract is either used for, or is being acquired for, an agricultural purpose or as a 1- or 2-family dwelling that is the mortgagor's residence. Iowa Code &sect;&nbsp;615.1 (2023). A 10-year statute of limitation period, from the date of entry of judgment, applies to enforcement or execution on a judgment obtained in an action on a claim for rent. Such limitation period is exclusive of any time during which execution on the judgment is stayed pending a bankruptcy action or order of court. If 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, the statute of limitation period is 2 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. Iowa Code &sect;&nbsp;615.1A (2023). As a general rule, subject to certain exceptions, no action shall be maintained to foreclose any mortgage after 20 years from its date if the mortgage does not reflect the maturity date of the indebtedness secured thereby. Iowa Code &sect;&nbsp;614.21 (2023).

STATUTE OF LIMITATION PERIOD

Mortgagee must acknowledge satisfaction thereof by execution of an instrument in writing, referring to the mortgage, and duly acknowledged and recorded. Iowa Code &sect;&nbsp;655.1 (2023). Releases must be recorded in the county recorder's office. Iowa Code &sect;&nbsp;589.8 (2023). A mortgage may be administratively released by the Iowa Finance Authority if the mortgagee does not record its release within 30 days following satisfaction of the mortgage. Iowa Code &sect;&nbsp;16.92 (2023).

REQUIREMENTS FOR RELEASE OF LIEN

Each person's homestead is exempt from judicial sale, unless a statute declares the contrary. Iowa Code &sect;&nbsp;561.16 (2023). Persons who reside together are only entitled to claim 1 homestead in the aggregate. Iowa Code &sect; 561.16 (2023). A homestead may contain one or more contiguous tracts of land with the house thereon habitually and in good faith used as a home by the owner. If the owner has 2 or more houses thus used, the owner may select which to retain as the owner's homestead. Iowa Code &sect;&nbsp;561.1 (2023). If within a city plat, a homestead must not exceed one-half acre in extent, otherwise it must not contain in the aggregate more than forty acres. Iowa Code &sect; 561.2 (2023).

HOMESTEAD ISSUES

Iowa is an equitable distribution state, not a community property state. Iowa Code &sect;&nbsp;598.21 (2023).

COMMUNITY PROPERTY

MORTGAGE TAX

See Transfer Tax, below.

DOCUMENTARY STAMP TAX

Iowa imposes a Real Estate Transfer Tax upon consideration paid or to be paid for the transfer of realty. Iowa Code &sect;&nbsp;428A.1. (2023). When there is consideration and actual market value of real property transferred in excess of $500, the tax is 80&cent; for each $500 or fractional part of $500 in excess of $500. Id. Certain types of transfers for consideration are excepted. Iowa Code &sect;&nbsp;428A.2 (2023). Notable transfers excepted are: <ul>
 <li>Any executory contract for the sale of land under which vendee is entitled to or does take possession thereof, or any assignment or cancellation thereof;</li>
 <li>Any instrument or mortgage, assignment, extension, partial release or satisfaction thereof;</li>
 <li>Deeds that secure a debt or other obligation;</li>
 <li>Tax Deeds;</li>
 <li>Deeds giving back real property to lienholders in lieu of forfeiture or foreclosures;</li>
 <li>Deeds given by public officials in furtherance of their duties (g., Sheriff's Deeds given to purchaser at foreclosure sale).</li>
</ul>

TRANSFER TAX

Iowa has adopted Restatement (Second) Conflicts of Law &sect;&nbsp;187, which generally permits parties to a contract to agree on the law to be applied to the contract so long as the parties have a substantial relationship to the chosen state law and the application of such law would not be contrary to a fundamental policy of a state having a materially greater interest in the subject matter of the contract. However, Iowa has a specific statute stating that any provision of an “in-state construction contract” is unenforceable to the extent that it makes the contract subject to the laws of another state or requires that any litigation, mediation, arbitration, or other dispute resolution proceeding arising from the contract be conducted in another state. Iowa Code &sect;&nbsp;537A.6(2) (2023). An “in-state construction contract” is defined to mean any “public, private, foreign, or domestic agreement relating to construction, alteration, repair, or maintenance of any real property in [Iowa]&hellip;” and could arguably include construction mortgages. Iowa Code &sect;&nbsp;537A.6(1) (2023).

ENFORCEABILITY OF AGREEMENTS AS TO CHOICE OF LAW

A receiver is generally available upon request during a judicial foreclosure proceeding if security deemed inadequate or danger of loss of rents or imminent waste to property. Receiver gives preference to the owner or person in actual possession in leasing the premises. If the property is agricultural land, the owner or person in actual possession shall be appointed as receiver without bond, if all parties agree. Iowa Code &sect;&nbsp;654.14 (2023). Rents or other income from the estate are applied as follows: first, to the cost of receivership; then, to the payment of taxes due or becoming due during the receivership; then, to pay the insurance or other benefits to the real estate; and finally, the balance as determined by the court. Id.

RECEIVERSHIP

With respect to owner-occupied 1- or 2-family residential property, a loan origination or processing fee cannot be greater than 2% of the loan principal. Iowa Code &sect;&nbsp;535.8(4) (2023). Commitment fees must be agreed to in writing; any other fee is prohibited if not expressly authorized by statute. Id.

ANY PROHIBITION OR SPECIAL RULES REGARDING LOAN APPLICATION, LOAN FEES OR COMMITMENT FEES

A security interest in a mobile or manufactured home is perfected by the delivery to the county treasurer of the county where the certificate of title was issued or, in the case of a new certificate, to the county treasurer where the certificate will be issued, of an application for certificate of title that lists the security interest or an application for notation of security interest signed by the owner. Iowa Code &sect;&nbsp;321.50 (2023). If a mobile or manufactured home subject to a perfected security interest is converted to real estate, the home owner shall tender to the secured party a mortgage on the real estate upon which the home is to be located in the unpaid amount of the secured debt, and with the same priority as or a higher priority than the secured party's security interest, or shall obtain the written consent of the secured party to the conversion, in which latter case the lien notation on the certificate of title shall suffice to preserve the lienholder's security in the home separate from any interest in the land. Iowa Code &sect;&nbsp;435.26(1) (2023).

MANUFACTURED HOMES

Any company (including a sole proprietorship), unless exempted, that makes, originates, or services at least 4 mortgage loans in a calendar year that are secured by owner-occupied 1- to 2-family dwellings located in Iowa, must obtain an Iowa Mortgage Banker License. Iowa Code &sect;&nbsp;535B.4 (2023). Several exemptions to this licensing requirement, including for banks, credit unions, insurance companies, or licensed real estate broker, exist, as provided for in Iowa Code &sect;&nbsp;535B.2 (2023). Individuals, unless exempted, also much obtain and maintain an annual Iowa Mortgage Loan Originator License to engage in the business of a mortgage loan originator with respect to any dwelling or residential real estate in Iowa. Iowa Code &sect;&nbsp;535D.4 (2023). Loan processors or underwriters who are independent contractors must also obtain and maintain a license to engage in such loan processing or underwriting activities in the state. Id. A foreign lender may engage in the following activities, among others, in Iowa without obtaining a certificate of authority from the Iowa Secretary of State: (i)&nbsp;creating or acquiring indebtedness, mortgages, and security interests in real or personal property, (ii)&nbsp;securing or collecting debts or enforcing mortgages and security interests in property securing the debts, and (iii)&nbsp;owning, without more, real or personal property. Iowa Code &sect;&nbsp;490.1501 (2023).

LENDER QUALIFICATION AND/OR LICENSURE

Iowa does not have special rules relating to loan modifications. If a modification of a mortgage is made, it should be in writing and filed with the recorder of the county in which the property is located.

MODIFICATION

Cleanup expenses incurred by the state shall be a lien against the property for which the cleanup expenses were incurred. Iowa Code &sect;&nbsp;455B.392(7)(d) (2023). The lien attaches when the state incurs the cleanup costs. Id. Regarding the lien's priority, the “lien shall be valid as against subsequent mortgagees, purchasers, or judgment creditors, for value and without notice of the lien, only when a notice of the lien is filed with the recorder of the county in which the property is located.” Id. Thus, the priority dates from the time of filing. To perfect the lien, “a statement of claim describing the property subject to the lien must be filed within [120] days after the incurrence of costs and expenses . . . .” Iowa Code &sect;&nbsp;455B.396 (2023).

ENVIRONMENTAL LIEN LAW

<ol start="572">
 <li> INCEPTION OF LIEN: Construction mortgage liens are preferred to all mechanic's lien claimants who commenced their work or improvements after the date the construction mortgage lien was recorded. Iowa Code &sect;&nbsp;572.18(2) (2023). A construction mortgage lien is a lien that secures loans or advancement made to directly finance work or improvements upon the real estate that secures the lien. Id. A construction mortgage generally recites that the mortgage is a “construction mortgage.”</li>
 <li> PRIORITY AS TO REMOVABLE FIXTURES: Fixtures are included in the definition of materials. Iowa Code &sect;&nbsp;572.1(5) (2023). For construction mortgage liens, see above. Mechanic's liens, including those for additions, repairs, and betterments, attach to the building or improvement for which the material or labor was furnished in preference to any prior lien, encumbrance, or mortgage upon the land upon which such building or improvement was erected or situated. Iowa Code &sect;&nbsp;572.20 (2023). Mechanic's liens posted within 90 days after the last material was furnished or labor was performed are preferred to all other liens that may attach to or upon a building or improvement and to the land upon which it is situated, except liens of record prior to the time of the original commencement of the work or improvements. Iowa Code &sect;&nbsp;572.18(1) (2023).</li>
</ol>

LABOR AND MATERIAL CLAIMS - PRIORITY ISSUES

No Iowa insurance company may issue title insurance. Iowa Code &sect;&nbsp;515.48(10) (2023). However, Iowa has a state-sponsored program for issuance of title guaranties, which is very similar to title insurance. See Iowa Code &sect;&nbsp;16.91 (2023). Title insurance from a commercial insurer rather than the state title guaranty program is often purchased from out-of-state title insurance companies. Prior to sale of real property, the abstract of title for the property must be brought up-to-date and certified by an abstractor. In the case of a refinance of a residential loan, an abstractor prepares a Form 900 Report of Title. An attorney then renders a title opinion. An attorney may issue a title guaranty certificate on the self-funded state title guaranty fund. Iowa Code &sect;&nbsp;16.91 (2023).

FORM USUALLY REQUIRED BY LENDER

The endorsements available from the Iowa title guaranty fund are comparable to those available from a commercial title insurance company.&nbsp; If traditional title insurance is obtained on Iowa property, there are no particular restrictions on what endorsements may be obtained. &nbsp; &nbsp;

Iowa

Mortgage Law Summary

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Mortgage Law Summary for Iowa

Iowa

Mortgage Law Summary

Continue reading theMortgage Law Summary for Iowa

Continue reading the
Mortgage Law Summary for Iowa