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Iowa Supreme Court: Interprets Foreclosure Judgment Statute of Limitation

Posted By USFN, Thursday, February 4, 2016
Updated: Friday, February 19, 2016

February 4, 2016


by Benjamin W. Hopkins
Petosa, Petosa & Boecker, L.L.P. – USFN Member (Iowa)

On January 29, 2016 the Iowa Supreme Court issued its decision in U.S. Bank National Association v. Callen, Iowa No. 14–1536, conclusively interpreting Iowa’s foreclosure judgment statute of limitation to bar enforcement of the judgment only, not the underlying mortgage.

The case involved a foreclosure judgment entered in February 2010. The mortgagee filed a notice of rescission in March of 2012, after the two-year limitation period set forth in Iowa Code Section 615.1.

Subsequently, the mortgagee filed a foreclosure action in October 2013. The mortgagor raised counterclaims for quiet title and wrongful foreclosure, contending that the notice of rescission was untimely and that the mortgagee’s right to foreclose the underlying mortgage was lost with the running of the two-year statute of limitation.

The case rested on the interpretation of the phrase “all liens” in Iowa Code Section 615.1, which provides that two years after entry of a foreclosure judgment, “all liens shall be extinguished.” The mortgagor urged the interpretation of “all liens” to include the underlying mortgage lien. However, the Supreme Court affirmed the lower courts’ rulings, concluding that when interpreted in light of the statute as a whole, “all liens” referred only to foreclosure judgment liens. Consequently the mortgagee retained the right to foreclose the mortgage.

Editor’s Note: The author’s firm represented the appellee U.S. Bank National Association in the case summarized in this article.

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