Free Home? Iowa Couple Investigated
Authorities are investigating an Ankeny, Iowa, couple who--after only making one mortgage payment--were able to save their home from foreclosure and have their mortgage voided by using a loophole in a 100-year-old state law.

The couple was able to get their mortgage voided by using a law requiring both spouses’ signature on the mortgage documents. During court foreclosure proceedings on their home, Matt and Jamie Danielson blamed a hasty home loan approval by their lender and the fact that Jamie Danielson never signed the mortgage in 2007 as reasons to keep their house and void the mortgage. They won in court.

The Iowa Finance Authority later filed a complaint against Jamie Danielson, who has her mortgage broker’s license, for using the same law to get one of her relative’s mortgage voided in 2006 due to a missing signature on mortgage documents.

The Danielson’s case has sparked the Iowa legislature to frantically try to close the loophole in the law. The Iowa House last week approved a bill to prevent people from getting a house nearly for free when one spouse fails to sign a mortgage. The bill now goes to Gov. Terry Branstad for consideration.

Under the current law, a mortgage not signed by both spouses is void except in situations where actual fraud can be proved, Rep. Chip Baltimore, R-Boone, who sponsored the House measure, told the Des Moines Register.

The law's original intent was to protect spouses from liability in case one spouse makes a financial decision that is unknown or against the others’ wishes.

Source: “Iowa Attorney General Orders Case Review of Ankeny Couple Who Got Almost-Free Home,” Associated Press (March 23, 2011) and “State to Investigate Case of Couple Who Got Free House,” The Des Moines Register (March 23, 2011)