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Entries in Iowa Attorney General (2)

Monday
Apr252011

Iowa Attorney General Reviewing Case of Couple Who Got Free Home

Digital Vision/Thinkstock(DES MOINES, Iowa) -- The Iowa Attorney General's office is reviewing the case of a couple who paid virtually nothing for their home because of a century-old Iowa law.

The $320,000 mortgage of Matthew and Jamie Danielson was voided on their home in a suburb of Des Moines because of the "Spousal Homestead" statute, as first reported by the Des Moines Register. That statute, which dates back to the 1880s, requires that both spouses sign a mortgage agreement. Only Matthew Danielson signed the mortgage in May 2007 in what he described as a "rushed" meeting with his mortgage broker, Jason Larson, in the food court of a shopping mall, according to the Iowa Appeals Court decision in May 2009 that voided their mortgage.

Geoff Greenwood, communications director for the Attorney General's office, said the Danielsons' case is "currently being reviewed" and is not a full-fledged investigation. He said the office first began reviewing the case late last month.

At the meeting that finalized the mortgage, Matthew asked if his wife needed to be present and Larson said no, according to a court document. Matthew tried to call Jamie anyway because she handled the couple's finances and worked as a loan originator for a mortgage banker, the court document states.

The loan applications refer to Matthew as "unmarried," according to the court document, and the promissory note he signed was payable to CitiMortgage, the plaintiff in the Iowa Appeals Court case.

When the economy soured, Matthew's home-building business took a turn for the worse. Around the summer of 2007, the Danielsons anticipated a foreclosure and went to their attorney, Jerry Wanek, to file for bankruptcy. Wanek was the one who first noticed that Jamie hadn't signed and recognized the loophole, according to the Register.

When CitiMortgage initiated foreclosure proceedings in December 2007 against Matthew, he used that discrepancy for his defense and ultimately won in the Iowa Appeals Court in 2009.

The Danielsons did not immediately return requests for comments.

Rodney Reed, finance bureau chief of the Iowa Division of Banking, told ABC News that Larson withdrew his application to renew his broker's license in February 2011. Larson had no comment.

Though the Danielsons own their home because of the court's decision, there has been renewed interest in their story since Iowa Gov. Terry Branstad signed an amendment three weeks ago to the Spousal Homestead statute.

"There are some allegations that borrowers have intentionally misrepresented their marital status," said Bob Hartwig, legal counsel for the Iowa Bankers Association, who would not comment specifically about the Danielsons' situation.

Hartwig said the original intent of the law was to protect one spouse from the other.

"It was to prevent a spouse from unilaterally transferring a home out from under the other spouse," said Hartwig, who has been legal counsel for the Iowa Bankers Association for 14 years.

He said he is aware of at least six disputes between lenders and homeowners in Iowa related to the statute. He said he is not aware of similar laws in other states.

He said the new amendment would apply to future cases and not the Danielsons' case. The newly signed amendment gives new defenses to lenders and allows judges to have some leeway if there is "unjust enrichment."

Copyright 2011 ABC News Radio 

Monday
Mar072011

Officials Hope for Foreclosure Deal Within Two Months

ABC News (WASHINGTON) -- Federal officials leading the investigation into allegations that mortgage companies broke state laws when processing foreclosures said Monday they hope to agree on a final settlement with banks within two months.
 
“What we’re really trying to do is change a dysfunctional system....We’re hopeful that we can reach a resolution that will be good for homeowners and good for the banks in the long run and most importantly good for the country,” Iowa Attorney General Tom Miller, who is leading the 50-state investigation, told reporters at a press conference in Washington on Monday.
 
Miller said he is hopeful they can wrap up the process in the next two months. “I mean a soft two, not quite a literal two, but I’m hoping,” he said.
 
North Carolina Attorney General Roy Cooper warned they should move quickly so uncertainty doesn’t linger too long. “We realize that the result that we come to can have an impact on the housing market and hence the economy. That’s why all of us at the table want it to be a positive impact and part of that is moving as quickly as we can,” he said.
 
Regulators and the state attorneys general are hoping to negotiate a settlement over the reported mortgage servicing problems, including the use of so-called “robo-signers” who rushed foreclosures through the system without properly reviewing the details of the cases.
 
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