Wednesday, March 23, 2011

Own Your Home and make No More Mortgage Payments??

Sounds ludicrous?? It absolutely is not as an Iowa couple recently discovered. In many states there is a homestead exemption for primary residences. Essentially, it means that you are declaring that you are going to stay in the home and utilize it as a primary residence. Various states have restrictions on what may qualify as a homestead property.

In most homestead states, there is a requirement that both spouses sign the mortgage documents. In many instances, only one spouse executed the documents (typically due to challenging credit of one of the spouses). In such cases, the Note can be legally voided and perhaps the mortgage or Deed of trust as well. The Iowa couple made on payment and then invoked the homestead provision to assert that the wife had never executed the loan documents with CitiMortgage (Citibank). The Court agreed.

Similar laws as the one utilized in Iowa also exist in Alaska, Arizona, Arkansas, California, Colorado, Georgia, Hawaii, and Illinois, among others. States where it doesn't apply: Delaware, New Jersey, Pennsylvania and Rhode Island.

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