DEAR BOB: I recently called my bank to have a rate modification on my 30-year mortgage to market level. But I was told they do not do rate modifications on fixed-rate mortgages, only on adjustable-rate mortgages. Is there any way I can lower my mortgage interest rate without paying refinance charges? – William M.

DEAR WILLIAM: If your mortgage originator still owned your home loan, a rate modification might have been possible. Lenders don’t want to lose good borrowers when interest rates drop. But your mortgage has probably been sold to another lender.

Purchase Bob Bruss reports online.

I learned this some time ago when I phoned my mortgage lender, Wells Fargo, about a rate modification on my otherwise satisfactory mortgage on which I had a superb on-time payment record.

However, I was politely informed that my mortgage had been sold in the secondary mortgage market and Wells Fargo was only servicing it so they couldn’t modify the interest rate. The result was I had to go through the refinance hassle.

Your lender probably has the same situation and is only servicing (collecting payments) your loan for the actual loan owner.

GET PERSONAL TAX ADVICE ABOUT STEPPED-UP BASIS

DEAR BOB: We bought our home in 1953. It was our personal residence until we moved to a life-care retirement home when we started renting it. We did not live in the house for the last 15 years. My wife passed away recently and I sold the house. My questions are related to capital gains tax. We held the property in joint ownership. I am trying to determine my basis for income taxes. We made capital improvements and deducted depreciation during the rental years. What I am unsure about is the adjustment of the stepped-up basis after my wife’s death. The language of the IRS documents is unclear. Can you help me? – Roger N.

DEAR ROGER: You need to hire a personal tax adviser to help you determine the exact stepped-up basis for the property after your wife’s recent death.

RENT-TO-OWN AGREEMENT SHOULD NOT PUT TENANT ON TITLE

DEAR BOB: In 2001 I sold a home through a realty company on a rent-to-own agreement. These tenants (friends of ours) had five years to arrange their own financing. But after three years of paying me rent towards “interest only” as written in the contract, they breached the agreement and moved out, leaving a huge mess of junk and damage. Now they are refusing to sign off the recorded deed, which includes their name. They insist their down payment be refunded, although I have receipts for damage repairs. What are my rights? – John L.

DEAR JOHN: That is the worst “rent to own” agreement I have ever heard about. You should never have allowed your so-called friends to record anything against your title. What were you thinking?

Rent-to-own, also known as a lease-option, is my favorite way to sell a home. There are major benefits for both the buyer-tenant and landlord. But I have never heard of allowing the buyer to go on the title. Who advised you to make that major mistake?

At this point, please consult a local real estate attorney to hopefully straighten out this mess. Your ex-residents have control over your title. Unless you clear up that problem, you have unmarketable title (and they obviously know that).

The new Robert Bruss special report, “24 Key Questions Answered: Living Trust Secrets Reveal How to Avoid Probate Costs and Delays,” is available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet PDF delivery at www.bobbruss.com. Questions for this column are welcome at either address.

(For more information on Bob Bruss publications, visit his
Real Estate Center
).

***

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