In Iowa the laws allow for both a judicial and non-judicial foreclosure, however the primary instrument of security is the mortgage. Most states which use this instrument of security do not allow for a non-judicial foreclosure. It takes about 150 days to process and they don’t allow post-sale statutory rights of redemption to the borrower. The lender is also not allowed to pursue deficiency judgments, so this makes the post-sale processes simpler as well as fairer to the new owner and the delinquent borrower.
In the case of a judicial foreclosure the lender files a suit against the borrower in order to obtain a decree of sale. The court examines the case and if they agree that the borrower is in default they give them a certain period of time to repay the delinquent amount. They also have to pay costs in regards to this, if this amount is not paid within the stipulated time frame, a court order is granted for the sale of the property to take place.
Borrowers also have the option of avoiding the foreclosure process by agreeing to a non-judicial foreclosure. In this case they are able to voluntarily convey all their rights to the property to the lender. The lender has to agree to this conveyance however, and this precludes them from pursuing a deficiency judgment in the case that the sale of the property does not meet the amount owed regarding the delinquency. It also means that the lender is given immediate ownership and access to the property in question.
In the case of a non-judicial foreclosure the borrower is also required to sign a "disclosure of notice and cancellation". This is filed with the county recorder and it means they have given up all their rights of ownership and they cannot exercise any rights of redemption.