Matt and Jamie Rae Danielson are an Iowa couple who recently, according to news articles, won their home free and clear of any encumbrances because of a quirk in their state homestead laws, and after making only one mortgage payment. The clear title on the $278,000 appraised home was awarded the Danielsons in 2009 after an appellate court ruled that the mortgage was void without the signature of both spouses. It seems the State of Iowa has homestead laws dating back to 1888 that declare mortgages are not valid until they are signed by both spouses.
When the Danielsons applied for the loan, both had good high paying jobs that resulted in grossing a six figure income for the family. At the time of closing, Jamie was out in the field working and Matt couldnt raise her on her cell phone. Matt, being rushed by the company that was handling the closing, signed the mortgage papers, and Jamie was never asked to come back in to sign. Without realizing it, the couple had entered into an illegal document, at least, according to the homestead exemption laws of Iowa.
Soon after the closing, Matts construction business went completely belly up when he was sending out more money than he was taking in. Jamie had been working as a mortgage loan originator, and because of the housing crisis, she was already seeing her income dwindling. Construction was also down, and Matt could not even get local construction work from others, let alone, a contract of his own. It wasnt long until the couple began having to downsize, cut expenses, and get behind on bills. One of those bills they got behind on was the mortgage payment for their new home.
Their financial collapse came swiftly, and CitiMortgage just as quickly responded to the default on the loan with foreclosure notices. The notices left the Danielsons with only one recourse to save their home, filing for bankruptcy protection. They hired a bankruptcy lawyer and took CitiMortgage to court. They won their suit, and the rest is history.
Since the Danielsons were awarded the title to their place free and clear, they have had to absorb numerous emails and calls from outraged people who think they somehow cheated the system. CitiMortgage reserves the right to sue the Danielsons to place a lien on the home if it ever sells, but hasnt done so to date as far as this writer knows.
Despite the skeptical critics who think the Danielsons own something they shouldnt, there is no indication the Danielsons did anything wrong when they hired a bankruptcy lawyer and exercised their Constitutional right to file for bankruptcy protection. If there were any mistakes made and blame to be passed out, you might be wise to look at the loan and closing companies to see who has the responsibility of knowing the state laws. After all, they were the ones in charge to make sure all the legal paper work was done properly at closing.
The Danielsons hired a good bankruptcy lawyer who protected their interests when the time came. Laws are placed into existence for a reason. The homestead laws of Iowa were placed their to protect its citizens from the unscrupulous conduct of others. Bankruptcy laws are legislated by Congress as ascribed by the Constitution of the United States, and they have been written for the protection of debtors. When a quirk in the law happens like in the Danielsons case, the balance of justice leaned in favor of the weaker participants, but if the scales tilted too far, they can be righted by new laws. In the case of the Danielsons, the laws favored them this time, and rightly so.
Bankruptcy laws can be complicated, and common sense indicates you will probably need a bankruptcy lawyer in order to properly understand how these complex laws may apply in your situation. If you determine you are in need of relief from the stress associated with debt and you live in or around the metropolitan area of Memphis, Tennessee, Arkansas, and Mississippi, contact us today at . We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.
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