Mortgage Laws
Do you have plans for securing a home in Iowa? Are you seeking a mortgage loan in the state for the purpose? All important aspects of
mortgage in Iowa are revealed here. The information here will serve you in furthering the object of acquiring a home mortgage loan in the
foremost farming state of the U.S.-Iowa.
- Just like several other states of the U.S., the mortgages in Iowa are also governed mainly by state statutory and common law. The lenders in the state are regulated by the federal or state law or agencies.
- Iowa State Mortgage Broker Licensing is regulated by Iowa Division of Banking (IDOB). No particular educational qualification/experience is required to obtain the Iowa State Mortgage Broker License. The obtaining of the license gives the licensee authority to arrange mortgage loans or commitments for such loans on Iowa residential property (real estate). Normally a licensing decision is made within 90 days of application. Iowa Association of Mortgage Brokers (IAAMB) is an affiliate of the National Association of Mortgage Brokers (NABB). These two organizations aim to impart the best education and provide legislative support for Iowa Mortgage Broker License aspirants.
- The SMMEA or Secondary Mortgage Market Enhancement Act of 1984 preempts Iowa law by providing state banks with the authority for investing in the obligations (without limitation) of the Federal Home Loan Mortgage Corporation (the Freddie Mac).
- In the state choice of adjustable rate mortgages (ARMs) by home buyers continue to increase in
popularity in spite of historically low rates on fixed rate mortgages.
- When the amount due on a mortgage is paid off, the mortgagee, the mortgagee's personal representative or assignee, or those legally acting for the mortgagee should acknowledge satisfaction thereof by execution of an instrument in writing. There should be reference to the mortgage and it must be duly acknowledged and recorded. This person (mortgagee, assignee or one legally acting for mortgagee) may, upon full performance of the conditions of the mortgage, fail to discharge such mortgage within 30 days after a request for discharge. In such case the mortgagee is liable to the mortgagor and the mortgagor's heirs or assigns, for all actual damages caused by such failure, including reasonable attorney fees.
Any claim for such damages can be asserted in an action for discharge of the mortgage. In case the defendant is a non-resident of Iowa such action can be maintained upon the expiration of 30 days after the conditions of the mortgage have been performed without any prior request or tender.
- The lenders are quite often not permitted to foreclose at all - a court may declare a moratium on foreclosure owing to an economic emergency. In case of non-agricultural property in the state there are basically two processes by which lenders may foreclose on a mortgage in default. These are:
- Judicial foreclosure process: Involves filing a lawsuit in court governed by principles of equity law. It takes 4 to 6 months.
- Alternative non-judicial voluntary foreclosure process: Here the borrower signs a deed and hands over the property concerned to the lender.
- Deficiency judgments are not allowed in Iowa. Nor is there any right of redemption of mortgagors in the state.
- Upon entering of the judgment of foreclosure in a court the clerk has to record with the recorder an instrument in writing. This should be referring to the mortgage and duly acknowledging that the mortgage was foreclosed. Alongside it should be giving the date of the decree.
On full payment of judgment and satisfaction upon the judgment schedule of the court the clerk has to record with the recorder an instrument in writing. This should be referring to the mortgage and should be duly acknowledging a satisfaction of the mortgage.
