SF 494 died for the session in committee yesterday. SF 494 is one of the Iowa State Bar Association Real Estate Section’s legislative priorities. The “white knight” bill would allow for an assignment of the mortgage at the sheriff’s sale in a foreclosure.
This was the bar’s attempt to “think outside the box” on ways to keep Iowans in their homes amidst the foreclosure crisis. This basically would allow a private work-out on the loan while taking out the foreclosing third party lender. (Let’s face it, the white knight in these situations would be grandma or some other well-to-do relative.)
The bill will be alive for the 2012 session. Legislators apparently fretted over potential for bad actors to sneak in and do more injury to borrowers. The Real Estate Section felt that these concerns had all been adequately addressed. In the mean time, this new approach remains unavailable for another year.
