By Edith Lank/On homes and real estate: Why refinancing is difficult for reader

Q I have made three attempts at refinancing my current mortgage. My credit score is good (around 773-800). I am retired with a pension, Social Security and a 401(k).

One lending company wanted me to escrow taxes as well as pay mortgage insurance. The appraisal for that loan was at 80 percent of value, but they still would not make the loan without an escrow account or mortgage insurance. I refused that loan. Then, I tried two other lending institutes and received the same reason for denying the loan.

Are the loan companies really saying my property would not bring the loan amount should they have to foreclose? Or are they worried about my age/ability to repay? Please advise if there is any way for me to get refinanced at today’s low interest rates.

A. Great credit score! But it’s their bat and their ball, and if you want their money, you have to play by their rules.

Trust me, they aren’t allowed to take your age into account. Those lenders are following identical guidelines because they all intend to sell your loan on what is known as the secondary mortgage market.

After the turmoil and troubles with mortgages in the last couple of years, companies like Freddie Mac and Fannie Mae won’t buy loans unless they meet today’s stricter lending standards. Sorry, but that’s the way it is.

Q. I need a good real estate lawyer to help me. How do I find one?

A. The standard advice is to ask your friends for references. Or you can call your county’s bar association and get a list of lawyers who specialize in real estate. You might also call a couple of banks and find out what law firm handles their real estate matters. Or ask local real estate brokers for the names of their own attorneys.

Q. My mother-in-law died in April and left a house in an adult community with a $115,000 mortgage. Once a week, my wife has to travel 300 miles round-trip to oversee the vacant house.

After crunching the numbers, such as mortgage, HOA fees, taxes, utilities, traveling and toll expenses (let alone the wear and tear on the body), it would be less costly to give the house away at below the prevailing market. Unfortunately, real estate agents are reluctant to list the house at way below the prevailing market price — for fear of destroying the selling price (and their commissions) of the many houses for sale in the area.

Our attorney tells us we have two choices. No. 1: Foreclose; he doesn’t recommend this because of the complications involved. No. 2: Sell the house in order to get out of the expenses. We would give the house away to anyone willing to take over the $115,000 mortgage.

In the area, the market price of similar houses is about $140,000 and takes about a year to sell. How would you suggest selling or giving the house away?

A. I find it hard to believe a real estate broker wouldn’t enjoy marketing the property at a bargain price. But if you really can’t find an agent, just put the place up for sale on your own. Try $120,000 for some prompt response.

Just watch out for scams and unqualified buyers. As for letting someone take over the mortgage — if it’s an FHA or a VA, a financially qualified buyer might do that. But any other kind of mortgage will probably have to be paid off when there’s a change in ownership.

And just for the record: When a bequest doesn’t make financial sense, it’s possible to decline it.

Q. You told the individual who borrowed the Good Faith Deposit that she shouldn’t buy at all. You’re absolutely right. But you didn’t give a clear next step she could follow. Her letter indicates she’s already signed a purchase contract. I’m curious why you didn’t suggest that she void the contract due to the inability to get a loan.

A. In the item you mention, the would-be buyer borrowed her $1,500 earnest money deposit from a friend. She said she was worried about committing fraud by telling the mortgage lender it was a gift from a relative. My feeling was that anyone who had trouble laying her hands on that much cash was clearly getting in over her head; she should forget about buying altogether.

I didn’t advise her about voiding the contract because I’m not a lawyer. And neither of us knows what that contract says. It probably gives her the right to drop out and have the $1,500 returned, if she can’t get the loan she needs. But maybe it doesn’t.

Ÿ Edith Lank will respond to questions sent to her at 240 Hemingway Drive, Rochester, N.Y. 14620 (please include a stamped return envelope), or readers may e-mail her at ehlank@aol.com.

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