Free house, anyone? Or how to save on real estate big time. You’ve got to read this story by my colleague Sheree Curry and chime in — hope I get it straight: a couple in Iowa made one payment on their $278,000 home and then went to see a bankruptcy attorney about letting the house go after just one payment. The guy lost his business and could no longer afford it. Matt and Jamie Rae Danielson were in a pickle, a big pickle. First of all, they had just lost a larger home and property, and I am not clear on how they managed to get this second, smaller home financed after that you-know-what show, but they did. And Jamie even worked for a mortgage broker, First Horizon. Well, that bankruptcy attorney they went to see ended up being their best friend ever. He found a loophole in the Iowa homestead laws. Seems their mortgage with CitiMortgage was invalid or void without the signature of both spouses, not merely void-able by the spouse who did not sign. In other words, both spouses must sign a mortgage in order for it to be valid. But Jamie never signed it. Matt met the mortgage broker at a Food Court and signed without her because he could not reach her. I guess no one caught it and — now they own a home.
I sent Sheree an email with some questions, but here’s my BIG question: could this happen here in Texas with our Homestead laws?
Let’s find out!