Foreclosure is the legal process by which the lender in a mortgage arrangement takes possession of the property (usually a house) that secured the loan. This is done when the West Des Moines, Iowa debtor has repeatedly failed to make their payments. When a house is foreclosed, it is usually sold at auction shortly thereafter. This is because banks usually want to get rid of the property as soon as possible, even if it means losing some money, and an auction is an easy way to do this.

In all states in the United States, including Iowa, foreclosure by judicial sale is an option. This allows the sale to be conducted under the supervision of a court, to ensure that the bank makes a good faith effort to get a fair price, and that the proceeds above and beyond the balance of the mortgage (if there are any) go back to the debtor. In some states, original mortgages are "non-recourse loans," meaning that the lender can only recover ownership of the house in the event of default. If the house is now worth less than the balance of the mortgage, the lender has to take the loss. You should speak with a West Des Moines, Iowa lawyer to see if this state is one of them. However, it is almost always the case that this protection does not apply to loans which have been refinanced.

How Can I Avoid Foreclosure in Iowa?

First, and most importantly, you should not ignore the issue. Failing to respond to foreclosure calls from your lender will not make a problem go away. You should stay in touch, and be honest with, your creditor as much as possible. You should remember that banks in West Des Moines don't want your house. While the foreclosure process can be devastating for the homeowner, it's no walk in the park for the bank, either. They expected to make a profit through interest on the loan paid over time, and foreclosure is a last resort, allowing them to cut their losses and move on. If you are honest with them, lenders will usually try to accommodate your changed financial situation, to avoid a default on your part, and the necessity of foreclosing on their part.

If you can't work anything out with your lender, or have become completely unable to make any mortgage payments, a "short sale" might be a good option. This allows you to sell your house for whatever price it can get, and hand the proceeds over to the lender. If the sale price is less than the balance of the loan, the rest of the debt might be forgiven. You could also consider a "short refinance" which allows a chunk of the debt to be forgiven, and lets you refinance the rest.

How Can A West Des Moines, Iowa Attorney Help?

If you are facing the possibility of foreclosure, a good West Des Moines, Iowa real estate attorney can help. At the very least, they will be able to inform you of your legal options.