So, when we ran across this story about an Iowa couple that got a "free house" due to a wonko loophole in Iowa law, we thought, "Yippee!" Finally, someone stuck it to the big bad banks.
Sure, we hate thinking this way, but since this whole financial crisis started, we've heard story after story of banks messing around with hidden fees and costs, and so many banks giving loans and mortgages to people knowing full well they couldn't afford it. It was nice to finally hear that a homeowner won a victory. It was like Homeowners 1, Banks 2.36 million (the number of properties repossessed from December 2007 through June 2010).
But, as with everything, as everyone should do whenever signing documents, you need to read the fine print. So, we read the fine print of this story about Matt and Jamie Danielson ... and those lucky homeowners don't seem so lucky anymore.
Now the facts are a bit tough to follow, a bit hazy, a lot of murky details, but I guess Matt and Jamie Danielson bought a house, and when it came time to sign the mortgage, Jamie was late, so only Matt signed the documents. Within a month, Matt's business folded, and they knew they couldn't make the mortgage payments.
Since they did not want to be foreclosed on (again), they got a bankruptcy lawyer -- who said because only one of them signed the mortgage papers, the bank can’t foreclose on them. Some random Iowa law (and it's a law in other states, too) says if only one spouse signs a mortgage, it is null and void. So, the house is basically theirs, until the bank puts a lien on it -- which it hasn't done since the settlement in 2009. So, the Danielsons are living there ... for free.
See, it sounds like a cute little story, right? But (and I love buts), it's become news that this couple had not one but two previous foreclosures before the "free house" incident -- and have mucho bucks in unpaid debt. Think $1.42 million in unpaid debt, even though, according to records, they profited from the other two foreclosures. So, they profited from two foreclosures and now got a free house with the third?
But (yes it's a "two-but" story!), it gets even shadier. Jamie Danielson used to work as a loan originator or lender and, most likely, knew what would happen if she didn't sign the mortgage. Especially since a relative of hers used a similar loophole to also get a "free house."
Yeah, this story is no longer cute ... now it's just skeevy.
Of course, the Danielsons are claiming their innocence. Of course, officials are lodging complaints against them. No one may ever know the truth, but I gotta say, it all seems really, really shady on the Danielsons' part. I know people get into debt trouble, I know it is tough times out there, but when you hear about repossessed cars, loan collection agents calling, three foreclosed homes (when you aren't supposed to be allowed to secure another mortgage for 7 years after a foreclosure), AND you add in the the fact she worked for a lending bank ... just like with a duck, if it walks skeevy, if it sounds skeevy, it probably is skeevy.
Can it be I'm actually rooting for the bank on this one?
What do you think of this "free house" story?
Image via respres/Flickr