Foreclosure is the legal process effected through the court system in which a mortgagee (lender—often a bank) terminates a mortgagor’s (borrower’s) interest in the real property in which the mortgagor gave the mortgagee a security interest (a lien) as collateral for the loan used to purchase the property.

Foreclosure generally occurs when a homeowner defaults and fails to make mortgage payments as required by the loan agreement (promissory note).

Foreclosure allows the lender to seize the property, remove the homeowner, and sell the home—all of which are legal remedies the mortgagor and mortgagee agreed to in the mortgage contract.

In Iowa, foreclosure is a judicial process, meaning that the lender must go through the courts to terminate a homeowner's interest in their property due to default on mortgage payments. When a homeowner fails to make payments as stipulated in the loan agreement, the lender can initiate a foreclosure action. The process begins with the lender filing a lawsuit against the borrower. If the court finds in favor of the lender, it will issue a judgment for the foreclosure and order the sale of the property to satisfy the debt. The homeowner will be notified and given a chance to respond to the foreclosure action. Iowa law also provides a right of redemption, allowing the homeowner a specific period after the sale to repay the full amount of the judgment and reclaim the property. If the homeowner does not exercise this right, the new purchaser at the foreclosure sale becomes the legal owner of the property. It's important for homeowners facing foreclosure to consult with an attorney to understand their rights and any potential defenses they may have.