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Loophole Gets Couple a House for Just One Payment

Facing foreclosure, they discover a 123-year-old law
By Evann Gastaldo,  Newser Staff
Posted Mar 17, 2011 12:11 PM CDT
Updated Mar 20, 2011 4:30 PM CDT
Free House: Iowa Loophole Gets Couple Facing Foreclosure a House for One Payment
No, this is not the Danielsons' home.   (AP Photo/David Zalubowski, file)

Thanks to a loophole in Iowa law, Matt and Jamie Danielson now own their $278,000 home outright—for the cost of just one mortgage payment. The Danielsons fought foreclosure—and won—by citing a 123-year-old law that requires mortgages be signed by both spouses. A home-loan approval Matt Danielson describes as “rushed” involved paperwork being signed at a mall food court, where the mortgage broker said Danielson’s wife didn’t need to sign anything.

The loan was approved, but the once well-off Danielsons were in bad financial straits and made only one payment to Citimortgage, the Des Moines Register reports. They were preparing to move out when their lawyer alerted them to the loophole. The mortgage is now void and the home is theirs, but Danielson insists, “It's not like we're rolling on easy street. We still struggle just like everybody else does in this economy.” Legislation is in the works to prevent a similar situation. (More Iowa stories.)

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