Question: How far delinquent must a loan be for the lender to threaten me with foreclosure? At this moment it's only 3 weeks late and the mortgage lender says he can foreclose if he wants. What's up?

Answer: A mortgage is a contract. Lenders advance money with the expectation that it will be repaid in a full and timely manner according to a given schedule. When you miss a payment or a payment is late, the contract has been broken. In the usual case, lenders do not want to end the loan, but mortgages have been foreclosed under the circumstances you describe. Please pay your mortgage, apologize to the lender, and if the lender does want to foreclose see an attorney immediately.

Question: Our sewer line to the street was blocked and the drainage company wanted to clear the line from the roof. Why would they go to the roof to clean out a clogged drain?

Answer: Your plumbing system includes a "backvent" -- a pipe which extends up through the house and goes through the roof. This vent prevents the build-up of gases and helps the plumbing system discharge waste into larger lines at the street. By using the backvent the drain cleaning company did not have to remove any toilets or open any pipes to run their equipment down the line. Older pipes, in particular, can break when opened and repairing them can be both expensive and messy.

Question: I want to buy an old house and tear it down. The owner will only sell the property as "commercial" real estate. Why?

Answer: One possible reason is that if the property is sold as a "residence" then the owner might have certain repair and disclosure requirements. If the property is sold as "commercial" real estate then residential standards may not apply. For details, see your broker or a local real estate attorney.

Question: I was laid off for nine months last year so my mortgage application looks awful. Now I have a job. How will my unemployment impact a loan application?

Answer: People in many industries have seen tough times during the past few years. Employment is surely an issue to loan underwriters, but it is not the only issue. Is your new job at the same pay or better? Have you maintained your credit standing? Is your new position likely to be stable over time?

Sit down with a lender and obtain a mortgage "pre-approval" before entering the real estate marketplace, explain your situation, and have your file reviewed by a mortgage underwriter. While a "pre-approval" is not an absolute loan commitment (because lenders must look at the property appraisal and other factors), it will give you a good idea of how much you can borrow. Your real estate broker can suggest local lenders who can help in your situation.

Question: My father wants to sell his home to my wife and I. The market value is probably $500,000 but he will sell it to us for $200,000. How should we structure this sale?

Answer: Your father is giving you a $300,000 gift and a gift of this size may raise questions regarding gift and estate taxes, so he needs to speak with a tax professional such as a CPA, tax attorney or enrolled agent.

The right strategy will depend not only on the house and the size of the gift, but also such issues as your father's age and health, his income, the size of his estate, the use of trusts, etc. Also, do you have one or more siblings? If yes, what do they think about this arrangement?

Since 2001 individuals have been allowed to give gifts valued at $11,000 annually without paying a federal gift tax. So, for example, your father could give you a $22,000 interest in the property each year ($11,000 for you and $11,000 for your wife) and you could receive your $300,000 over time and without your father paying any gift tax. Using this approach (and there are others) your father would not have a gift tax and the size of his estate would be reduced. For general gift information, see IRS Form 709-A. For specifics, have your father speak with a tax professional.

Lastly, be certain your father has a will and a living will to document his preferences and protect his assets.

Have a real estate question? Send your inquiry to . Because of the volume of mail received, Mr. Miller cannot respond to questions individually or privately. Published letters may be edited for space and style. For comments regarding other Realty Times articles, please contact individual authors by pressing here.

This column is designed to provide accurate and authoritative information in regard to the subject matter covered. It is made available with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, or other professional services. If legal services or other expert assistance is required, the services of a competent professional person should be sought.

Published: September 26, 2003

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