Foreclosure Law in Iowa
In Anamosa, Iowa, foreclosure is a legal process through which an entity which has issued a mortgage takes possession and/or ownership of the property that secured the mortgage, because the person who took out the mortgage has consistently failed to make payments on it. The property in question is usually a house.
When individuals are facing foreclosure, it usually involves a house. The bank will take the house with the intent of selling it at an auction, hoping to cover whatever's left on the mortgage, giving them at least a chance to break even on the loan.
In every U.S. state, including Iowa, a borrower has a right to a judicial sale of their foreclosed property. A judicial sale is simply an auction overseen by a court. The purpose of this is to make sure that the lender takes reasonable steps to sell the home for the highest possible price, and to ensure that the homeowner has an opportunity to bid on the house, if he or she is able. It is in everybody's interest for the bank to get the highest price possible for the house, even the borrower's. If the house fetches a higher price than what's left on the mortgage, the buyer can keep what's leftover. On the other hand, if it fetches less, the buyer might have to pay the deficiency.
In some states, original mortgages are known as "non-recourse" loans, making the above problem a non-issue. This basically means that once the mortgaged property is sold by the lender, the debt is discharged, even if the sale nets less than the remaining balance on the mortgage. The borrower will simply have to write this off as a loss. However, this usually does not apply to refinanced or second mortgages.
How to Possibly Avoid Foreclosure in Anamosa, Iowa
It is absolutely essential that you maintain a line of communication with your lender. Your can't expect your lender to accommodate your changed financial situation if they don't know about it. Ignoring the issue and hoping it will go away is the worst possible solution.
You should remember that the bank doesn't really want your house. They granted a mortgage hoping to make a profit from interest, and that's what they'd much rather do. They aren't in the business of buying and managing real estate. Therefore, banks will sometimes go to surprising lengths to accommodate your financial hardship, especially if it's temporary.
If your financial situation suddenly changes, your lender may be willing to change the terms of your loan, at least temporarily, allowing for lower monthly payments. If this means that they will be able to get some money from you, with default as the alternative, it can become an attractive option for everyone involved.
Some buyers in Iowa, when none of the above options have worked, resort to a "short sale." This involves selling a house which is about to be foreclosed, usually for less than its market value. If the house sells for less than what's left on the mortgage, the homeowner is relieved of the duty to pay the balance. If you have decided that you have no hope of making your mortgage payments, and foreclosure seems inevitable anyway, this might be the way to go.
Can a Anamosa, Iowa real estate attorney help?
In Anamosa, Iowa, dealing with a possible foreclosure is never easy. However, the assistance of a good real estate lawyer can make the whole process much more bearable, and possibly delay or even prevent the foreclosure altogether.