Real Estate - Nationwide

Question: Three years ago my husband became very ill and stopped working. We couldn't handle the mortgage payments, so I asked my brother and his roommate to transfer the house to their names just until we were really to get the house back and they agreed. We continued living in the house and making the payments. Now, my brother and his roommate do not talk to each other and we want the house back, but the roommate does not answer my phone calls.

Do you think I can do something to get my house back, like filing a quitclaim deed form? What happens if he doesn't cooperate with us? Can the courts do something to force him to sign? He hasn't put up any money during these three years.

Answer: When you transferred title, you effectively sold the house. That you have made payments is not an issue -- you also have had use of the property and are thus essentially renters.

Given that you have made all payments, it is unclear why title was transferred. Did the new "owners" provide any consideration to gain title? Was there a mortgage on the property? Who collects insurance if there's a fire?

You may need to pay the current owners for their interest in the property. For details, please contact an attorney.

Question: I recently was hired as a loan officer. I eventually want to become my own broker.

I live in an area where the housing market has shot up in the last five years; many local residents cannot afford to buy houses in this area. Lenders are pushing stated income loans.

I sincerely want to help borrowers buy their first home, but I do not want to do stated income loans. In fact I have pushed some potential buyers to wait one or two years and work on their credit and debt ratios, only to see someone else put them into a stated income loan where they are making minimum payments that don't even cover interest.

Is this a business where I can truly make honest money? If not, then this is not going to work out for me.

Answer: There are several issues here: First, there are selected instances where stated-income loans may be acceptable, such as when the borrower accurately applies for an option loan, understands the risk and reasonably expects a growing income. Being an absolutist and not doing any stated-income loans may not benefit all prospective borrowers. A better approach is to provide the financing that works best for individual borrowers -- and not providing loans that are inappropriate.

Second, you are right to counsel borrowers and to suggest -- when appropriate -- that they first take steps to improve their credit. This means that you will effectively decline some loans and lose some business. However, there is plenty of business out there and if you establish a reputation for fair dealing your origination volume will grow.

Third, there is no doubt that some people have used option loans with little down to acquire property and then sell at a profit. Whether such a strategy will be successful in markets with less appreciation is surely questionable.

The federal government has been cracking down on lenders and advising your approach; that is, applying greater conservatism to the lending process to reduce the volume of loans with little down and negative amortization.

Question: I'm currently in the U.S. military and was wondering if you could give me some info on the areas hit by the hurricane. My wife and I wanted to look into buying some cheap land and a cheap house at a low monthly payment.

Answer: The best approach to buying property impacted by hurricanes Katrina, Rita and Wilma is to contact local real estate brokers.

That said, it is not at all clear that there is cheap land or cheap housing in Gulf Coast areas hit by the hurricanes. Properties in good shape are in demand and thus are not cheap, those not in good shape may require extensive repair and thus may also be something other than cheap when all bills are considered. Regardless of the condition of individual homes, there are substantial infrastructure issues in many communities.

Local brokers can explain the pros and cons for individual communities in detail.

Question: My sister and I just purchased a townhouse with only her on the loan and title for qualifying purposes. I now want to add myself onto the title. How do we go about accomplishing this? And how does this affect tax benefits and write-offs? I definitely want to take advantage of the write-offs as well.

Answer: You didn't buy a townhouse -- your sister did. You're not an owner, because you're not on the title.

This is not a minor point. To now put your name on the title means that ownership has changed -- which means also that the property has been "sold," thus transfer taxes may be due and the current lender may call the loan.

Before going further, speak with an experienced lender to see how you and your sister might jointly qualify for a new loan. An attorney can provide advice regarding title issues.

Question: We are renting a house and would be interested in buying it. I've read about experts advising buyers to avoid funding from lending institutions, and to buy directly from the seller. We've been able to obtain the owner's name, address and phone number from the Internet, and don't want to alert the management company renting the house about our interests.

We could afford paying more to someday own this house, and I'm sure both of us would benefit from a lease-option to buy. Do you have any suggestions on how to contact the owner about negotiating a rent to own? Is it like a 30-year mortgage where you pay the principle and interest to the owner? Please give me details on how the procedure usually works.

Answer: First, the lease agreement between the owner and the broker likely provide a fee to the broker if you buy.

Second, I'm not sure which "experts" advocate not using commercial lenders, but most owners plainly have little interest in both selling investment property and taking back a loan. An owner could sell the loan at discount, but why bother when financing with little or nothing down is readily available to buyers from commercial lenders?

If you like the house, why not speak with the leasing broker and see what may be practical and plausible.

Question: Last year my husband and I sold our home to my step-mother to get a lower rate. After the sale she signed the title of the home back over to us. We pay the mortgage bill, which is in her name. Next year we wish to sell the property and buy a larger home. My question is how do we proceed with the sale? Does the person whose name is on the mortgage sign the closing or the names listed on the deed? Will there be a capital gains tax on my step-mother if we sell 16 months after the date she took over the mortgage?

Answer: If your mom signed the title of the property back to you, you are the owner. But what does the lender think about this title change? Did the lender ask if she intended to use the home as a residence within 30 days of closing? Is the loan assumable without lender approval?

Real estate sales to relatives may raise special tax issues, so speak with a tax professional for details.

Question: My husband and I are considering what I think is a major move: We want to sell our home and put our equity into a duplex. One unit would then be owner-occupied while we rent out the other side. We have worked very hard to get the equity in our current home and have never been landlords before. Is this too great a risk with the equity we have built up? The only other "liquid" capital we have is a 401K.

Answer: Specifics surely count so the real answer to your question depends on which duplex, the local rental market, etc. And, certainly, there are no guarantees of wealth and success.

That said, in general terms what you are doing has excellent potential. You are gaining an additional source of income that will help pay off your mortgage. You are significantly increasing tax write-offs. You have the potential for profit by renting your unit and acquiring another property or by selling both units.

Before buying, however, work with an experienced broker. Be sure to consider such matters as maintenance, repairs and vacancies.

Question: My husband and I bought a house for $158,000. I put down $48,000 to reduce the payments, putting every penny I had into this house, but now my husband has had an "affair" and the marriage is over. We need to sell.

I am a stay-at-home mom and will not take less than $155,000 for the home. Assuming we can sell it for $155,000, how much money will we "make" or get in return? I just need to get my money back and to get on my feet again.

Answer: The price of the property will be determined by the marketplace. As to what you net after repaying the current mortgage balance and closing costs, that will depend on how the sale is structured, how long you've lived in the residence, etc.

Consult with an attorney that specializes in divorce matters before proceeding.

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