Question: I bought a vacation town home in a Florida resort property from a reputed builder. The broker who sold to me gave a letter in his letterhead that said he would lease back the property for two years. He even signed a guaranteed leaseback for one year. But after three months he got himself out of the whole thing on the pretext that the market has collapsed and he can no longer give the guaranteed leaseback.

What can I do?

Answer: Even builders must honor contractual obligations. If you have a valid agreement with the builder which requires him pay you for a year-long lease, then that is his obligation. If you have a valid agreement for him to engage in a second one-year leaseback then, again, that is his obligation.

Let's say that positions were reversed. Do you seriously think you could break a lease if you rented property from the builder?

For specifics have an attorney review both the letter and the leaseback agreement. Also, consider that if the builder goes bankrupt neither item may be worth anywhere near their original value.

Question: My husband and I are filing for divorce. He now wants to file for bankruptcy. We own this house together, but he has other money and property that he will transfer to a brother. The result is that I will lose this house and he will lose nothing. What can I do?

Answer: Bankruptcy judges are not likely to be impressed with sham transactions and hidden assets. Both your attorney and your husband's will likely explain the risks of such tactics.

The real issue here is that you and your husband need to work out a sensible arrangement given the assets you have.

Question: My wife and I (American citizens) are currently working in Dubai but would like to buy property in the States. What additional documents would we need -- is it true that we would need to put a higher down payment for a mortgage? Please help us as we are hearing all kinds of rumors and would like to get the straight facts.

Answer: Most probably you need more down because you would be buying as investors rather than as owner-occupants if you continue to work oversees.

You can certainly find lenders online. Most probably what you will need is a full docs loan application and a willingness to document income and employment.

However, you have the issue that buying real estate is best done in person -- for all the wonders of the Internet there is nothing that beats walking through a property, thus the need for local brokers -- and trips to the U.S. to physically see properties before making a major investment.

Question: I got myself into a situation where I got a loan to catch up on my home in exchange for a hefty "100%" pay back and I did a quick claim so that the lender could hold the title as collateral. This was all recorded so that neither party could do anything without the other's knowledge.

I then leased back the property with them holding title and me keeping my financing all the same and making payments to my new "landlord" and they paid my mortgage company. It is getting close to my lease end I am selling my property. They told me I had to use their landlord who is free with my equity money (authorizing an x% concession to potential buyers who accepted, and x% to their broker and x% to himself so I am now out a big portion of my equity). My question, am I obligated to pay him x% if the company I am leasing from said I had to use him and they signed the listing agreement?

Answer: What do you have to sell? Did you not give up title to the property when you signed the quitclaim deed?

By any chance, were you facing foreclosure when you got the loan? If yes, you need to see if your state has any laws relating to "foreclosure rescue specialists." Please see a local real estate attorney immediately or contact the consumer affairs office with your state attorney general for additional information.

Question: Is it true that there is a widening gap between those who can afford high-priced real estate and those that can't?

Answer: It has plainly become more difficult to obtain financing if your credit is weak. Credit, however, is not the same as income -- people can have big incomes and weak credit.

For a number of years there has been a growing "income gap." As the New York Times reports, "while total reported income in the United States increased almost 9 percent in 2005, the most recent year for which such data is available, average incomes for those in the bottom 90 percent dipped slightly compared with the year before, dropping $172, or 0.6 percent.

"The gains," said the paper, "went largely to the top 1 percent, whose incomes rose to an average of more than $1.1 million each, an increase of more than $139,000, or about 14 percent." (See: "Income Gap Is Widening, Data Shows," March 29, 2007)

Question: Where would you say is the most affordable place to live in the United States?

Answer: The most-recent National Association of Home Builders/Wells Fargo Housing Opportunity Index shows that the nation's most affordable major housing markets -- the places where the greatest percent of homes were affordable for the typical household -- was Indianapolis followed by Youngstown-Warren-Boardman, OH-PA; Detroit-Livonia-Dearborn, OH; Toledo, OH; and Grand Rapids-Wyoming, MI.

However, there's a different way to consider affordability: Take a look at most major metro areas and you can find areas where homes are moderately priced relative to local incomes. Local brokers can tell you more.

Question: What happens if a landlord rents to illegal immigrants? (I live in California)

Answer: During the past few years a number of local communities, including San Diego and Escondito, CA; Farmers Branch, TX; and Hazleton, PA, have enacted ordinances which ban rentals to illegal immigrants.

The catch is that squeezing out illegal immigrants also removes a portion of the workforce which provides an array of services to local communities. Thus, for example, Riverside, NJ and Valley Park, MO, passed rental limitations -- and then rescinded such rules. Other communities have faced costly legal challenges after creating such regulations.

The question of rental bans is a politically-charged matter, something which will need to be worked out over time. Right now, both sides are making their cases before town councils -- and an assortment of courts.

Question: If you have decent credit, say a credit score of around 750, but you don't have the money for more than about 5% down -- is it possible to buy real estate?

Answer: Sure. You would likely qualify for FHA financing, a program which requires 3 percent down plus closing costs. And at least until the end of the year, huge FHA loans for as much as $729,750 are available in high-cost areas.

That said, do you really want to get the biggest loan possible? With thin savings, what happens if there's a dip in your income or if costs rise?

Question: Where can I go to find current interest rates?

Answer: You can find rates posted on RealtyTimes.com. For an extensive collection of rates, indexes and histories go to HSH.com. HSH is a financial publisher and not a lender, so it does not sell loans.

Question: Did my condo management break my contract by renting out my unit without my permission and also receiving payment for it. I found out by accident. I went down to stay and found out that there was someone in it. I had to be put in another one. Not happy.

Answer: By any chance do you have a vacation property or a resort timeshare? Do you actually have a fee-simple real estate? Or, do you have a vacation license, vacation lease, or a club membership -- arrangements which are not actually "real estate." To answer your question you need to look at your management agreement. It may allow management to switch units in response to rental demand.

Question: I've been told that if I have to give my house back of if it is foreclosed upon then I will have to pay income taxes on the remainder of the contract; that is, the balance of the loan term. Can this be really true?

Answer: When a home is foreclosed the owner/borrower loses the property. However, the borrower is responsible for the payment of property taxes until the lender actually records a transfer of title.

Financial institutions, said Judge Christopher A. Boyko in his important decision throwing out 14 foreclosures actions in Ohio, "rush to foreclose, obtain a default judgment and then sit on the deed, avoiding responsibility for maintaining the property while reaping the financial benefits of interest running on a judgment. The financial institutions know the law charges the one with title (still the homeowner) with maintaining the property."

Have a real estate question? Send your inquiry to Ask Realty Times. 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. For past columns, please press Ask Realty Times.

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: April 11, 2008

Use of this article without permission is a violation of federal copyright laws.

Have a real estate question for Realty Times? Wondering about buying, selling, financing, refinancing or renting? Here's where you can send your question to Peter G. Miller, OurBroker®, a nationally-known columnist, author and reporter. Peter G. Miller has written six books -- including The Common-Sense Mortgage -- a guide with hundreds of thousands of copies in print. Miller was the original creator and host of America Online's Real Estate Center and joined Realty Times in 1998. Send your questions to . Because of the volume of mail received, individual questions cannot be answered privately and not all questions can be used. Published letters may be edited for space and style and all letters become the property of Realty Times upon receipt.