Couple Who Successfully Voided Mortgage Begin Feeling Heat Over Questionble Past; State Officials Say Earlier Incident Foreshadowed Their Legal Path

In Ankeny, Iowa, The Des Moines Register reports:

• The Ankeny couple who used a loophole in Iowa law to pay almost nothing for a home have a history of questionable foreclosures that have raised red flags among state authorities, The Des Moines Register has learned. The Register reported Thursday that Matt and Jamie Danielson put almost no money down on their Ankeny house in 2007, negotiated $50,000 in cash at closing and made just one payment before they fell into foreclosure. Yet they succeeded in voiding their $320,000 mortgage and kept the home despite foreclosure proceedings because Iowa law requires both spouses to sign a mortgage, and Jamie Danielson did not.

• In December, a top official at the Iowa Finance Authority lodged a complaint with Iowa's Division of Banking after Jamie Danielson applied to obtain a mortgage broker's license. The complaint alleges that Jamie Danielson had already racked up $1.43 million in unsecured debt; that she and her husband appeared to profit handsomely from two previous house deals that wound up in foreclosure; and that Jamie Danielson was involved previously in a loan obtained by a relative who got a house for free because the relative's spouse did not sign the mortgage.

• On Thursday at the Register's request, officials at the IFA's Title Guarantee Division released the formal complaint it sent late last year to the banking division. The newspaper contacted the Title Guarantee Division, which provides title insurance for lenders, because it had tried to help Citimortgage in its legal battle with the Danielsons.

• Matthew White, the IFA's deputy director, alleged in the complaint that both Jamie Danielson and her mother had worked for First Horizon, a lender involved in a mortgage with a relative, Troy Hudson. In late 2006, Hudson succeeded in having his mortgage voided and won his house in foreclosure proceedings because his wife, Jodi, had not signed the loan. The loan was prepared by Danielson, the complaint says.

• White and other IFA officials said in interviews Thursday that they believed the Hudson case foreshadowed the legal path that Danielson and her husband followed in the foreclosure on their Ankeny house the next year. "As a loan officer or originator, then or in the future, Jamie Danielson must be held to a higher standard than the normal homebuyer," White wrote in the complaint. "She had specific knowledge of what would happen if she did not sign the mortgage, and still fought to have the mortgage declared void against both of them."

• In the Register's article on Thursday, the Danielsons blamed hasty oversight by their mortgage company for their luck in acquiring the house.

For more, see 'Free house' couple's earlier foreclosures are questioned.

For story update, see Cousin's use of mortgage loophole not disclosed in court (The assistant attorney general who challenged Matt and Jamie Danielson's fight for a free house in court said Friday he was unaware a relative of the Ankeny couple had won a free house previously by using the same legal loophole).

Go here to read the complaint made regarding the Danielsons to the Iowa Division of Banking. This link includes exhibits, including Jamie Danielson's personal bankruptcy filing.

Go here to read the Court of Appeals decision involving Jamie Danielson's cousin, Troy Hudson.