Ask the broker: Make home affordable?

Q. In several recent columns you’ve told troubled home sellers to look for help under the government’s Making Home Affordable program. Isn’t it obvious that most people are doing this already?

A. Actually, no. Here’s an example: For the past few years Nevada has been among the most troubled foreclosure centers in the country. In January, says RealtyTrac, Nevada again led the nation in foreclosure filings.

Now you might think in a state substantially impacted by foreclosure trends, the one note on every refrigerator door would be a link to the Making Home Affordable program. The facts are entirely different.

A 2011 study by the Nevada Association of Realtors found that “61 percent of those surveyed had never heard of the HAFA or the Home Affordable Foreclosure Alternative program. Only 3 percent said they used and were helped by the Nevada Foreclosure Mediation program. Less than 50 percent even knew there was a federal website for foreclosure assistance. There is a clear disconnect between what the government is trying to offer and what is actually needed for struggling homeowners.”

For all the talk about foreclosures it’s apparent that many people don’t know that federal help may be available to them. As of December, the government had modified almost 580,000 mortgages. For most borrowers a modification means monthly costs have been slashed by about $525, a big number in many households and generally enough to help avoid foreclosure.

The government program is hardly perfect. Nearly 800,000 modifications have failed, but virtually all of these homes would otherwise have been foreclosed months earlier.

So should people who might fail enter the government’s modification program? You bet. It can at least create additional time to find a buyer, land a job or move with dignity.

The bottom line: If you’ve run into tough times, speak with your lender, contact your state attorney general (they often can point you to state and local programs) and visit MakingHomeAffordable.gov.

Q. Given real estate values and marketplace uncertainty, isn’t it better to rent than to buy?

A. This question arises with increasing frequency. To provide a sure answer is to claim knowledge of the future, something that can’t be done. What can be done is to consider what we do know:

First, there’s no single or simple answer. What’s true in one market may not be true in another.

Second, people have to live somewhere. While the population is growing there’s relatively little new home construction and we see changing housing patterns. Increasingly adult children are moving back in with Mom and Dad after graduating college and the formation of new families is being delayed.

Third, if the argument is that renting is now a better option than owning, does that also mean now is a better time to be a real estate investor because of rising rental demand? Reis Inc. reports for the first half of 2010 that apartment vacancies fell.

For specifics regarding population, job and vacancy trends in your market, speak with local real estate brokers and community development offices.

Q. Our usual property tax is about $4,000 a year. Our lender’s year-end 1098 form says we only paid $2,000 but local records show the tax was fully paid. Where’s the rest?

A. Most likely you refinanced toward the end of the year and a semiannual tax payment was made at closing. Check your HUD-1 from closing for the missing payment and also if prepaid interest or points were paid. Speak with a tax professional for specifics.

Q. What can we do if a tenant check bounces? Twice?

A. You have provided goods and services (use of the property) and are entitled to payment. You could seek criminal charges and an eviction, but that does not enhance your bank account. Ask if the tenants can get help from a family member or charity, or if the missing money can be repaid over time.

Ÿ Email Peter G. Miller at peter@ctwfeatures.com.