Question: If someone experiences a personal foreclosure, is it possible to acquire a mortgage through their business or corporate financials without personal history being a factor?

Answer: A home is a home and in the usual case must be in the name of a human owner. A loan to a corporation would be commercial financing, something not made to provide housing for an individual.

The reality is that personal history is a factor when underwriting a loan. Lenders are not going to ignore a massive financial blot, especially one which is recent, involves mortgages and caused another lender to take a loss.

Question: Should my real estate broker show me her marketing plan when selling my house?

Answer: Not "when" selling your house, but before you agree to list with one broker or another.

A marketing plan should outline exactly how the broker expects to offer your home for sale -- where it will be advertised, when or if it will be held open, the marketing materials that will be produced, the negotiating elements required to be successful in your market, etc.

It follows that if you're looking for a broker you not only want an individual who can produce a solid plan, but you also want someone who can execute it, who can get results. Thus local experience and performance are important.

Once the house is listed and made available for sale, you want to review the marketing plan to assure that it's being followed and to make such changes as the market may require.

Question: If I'm looking to do a 1031 exchange must both properties be in the same state?

Answer: No. The idea of a tax-deferred exchange is to trade "like kind" properties, not necessarily properties located within a single state. Thus, for example, you could trade a rental home in Maryland for a duplex in Ohio or a strip center in Florida for a farm in Kansas -- all are real estate.

Tax deferred exchanges must follow strict guidelines established by the IRS. This is not a do-it-yourself job. Get help from an experienced broker, exchanger or attorney.

Question: Where can I go to find records regarding who owns which properties in my neighborhood?

Answer: The local property tax or records office will have such information. But why leave home? Increasingly such information is online and available instantly and without cost. For a good list of information sites by state and local jurisdiction, go to The Property Assessment Directory at http://homepage.mac.com/researchventures.

Question: How often does a county assess my home if values have risen?

Answer: Property assessments are typically conducted from one to three years, regardless of whether values have gone up or down. Instead, the goal is to determine fair market value and establish a basis for property tax bills.

However, when a property is sold or refinanced then in some jurisdictions the value may be brought current to reflect the latest financing or sale changes, regardless of the most recent assessment.

For specifics, contact your local assessment office. They typically have a brochure or web page to explain their version of the process.

Question: What is OFHEO?

Answer: OFHEO is the Office of Federal Housing Enterprise Oversight, a small but keenly-important federal entity.

OFHEO's major mission is to oversee Fannie Mae and Freddie Mac, the two gigantic companies that buy most local mortgages. Fannie Mae and Freddie Mac then get investors to buy securities secured by local mortgages and the money from the sale of those securities is then used to buy more loan. Local lenders take the money they get from Fannie Mae and Freddie Mac, replenish their cash, make more loans, and then start the system all over again.

Fannie Mae and Freddie Mac buy "conforming" loans, mortgages that meet certain origination standards, such as loans with a maximum loan amount or down payment.

OFHEO exists to assure that Fannie Mae and Freddie Mac get it right, that they do not accept overly-risky loans, that they are properly capitalized and that they do not stray from their core mission. This is important stuff because Fannie Mae and Freddie Mac are former government agencies which have been spun off into the public sector -- but each still has a line of credit with the U.S. Treasury and together both have a loan portfolios that hold mortgages worth more than $1.3 trillion.

Given the mortgage turmoil seen in the past few years with the widespread use of toxic loans, OFHEO has been far more responsible than private-sector auditors and ratings agencies that have failed to understand the implicit risk associated with toxic loans. It has also been vastly more responsible than other federal regulators who have, essentially, declined to regulate. There wouldn't be toxic loans today -- and hundreds of billions of dollars in losses -- had federal regulators put an end to such financing in 2002, 2003 and 2004.

Question: My home is for sale. The question of title insurance came up with a friend recently and we were wondering who, buyer or seller, is responsible for paying the premium for title insurance upon sale of the house. He says the buyer, and well, I just don't know.

Answer: There is a great oddity here. In some areas of the country the tradition has been that sellers pay closing costs while in other areas it is the buyers who pay.

However, such customs go out the window in a sellers market because then buyers will pay most settlement expenses while in a buyers market it's the owners who will gleefully pay all closing expenses. (Well, maybe not gleefully ... .)

In all cases, the buyer has the right to select the lender and the closing agent. This is sometimes bargained away in exchange for some benefit. For instance, new home builders will trade a discount or upgrade if the buyer will agree to use their lender or closing attorney.

As to what happens in any given state, the usual rule is that who pays is not necessarily the same party that pays. For instance, a buyer can select a settlement provider -- and a seller can still pay some of the closing costs.

For specifics in your area and your market speak with local real estate brokers.

Question: I'm buying my first house. My income is great, my credit is a 676 and I am putting 20% down. I am noticing on the disclosure page of the Truth in Lending information that I will need to sign an IRS Form 4506-T. Here's the problem: My IRS history is not exactly perfect. I am paying $250 a month (and have been for quite some time) to pay off taxes that I should have paid on a large commission I received in 2002. As well, my 2006 taxes were late. Should I be concerned? As far as I know, the IRS and I are in a good relationship including having owed money for 2007 that I paid off immediately. Should I be worried about my loan falling out at the table or sooner?

Answer: The purpose of IRS Form 4506-T, a request for a transcript of tax returns, is not to underwrite loans, though that would not be a bad idea given the way many loans have been underwritten in the past few years.

Instead, Form 4506-T gives permission for a third party to look at transcripts of past returns. In completing this form it is important to take three steps:

• Fill in line 6 (put in the form number you will allow to be released, such as form 1040).

• Fill in line 9, the years requested (put in as few years as possible and "x" out the rest so that no one else can add a few years for you).

• Date the form: "Form 4506-T must be signed and dated by the taxpayer listed on line 1a or 2a," says the IRS. "If you completed line 5 requesting the information be sent to a third party, the IRS must receive Form 4506-T within 60 days of the date signed by the taxpayer or it will be rejected." In other words, if you do not date the form it can be pulled out at any time, magically dated and then used to check your records. If you date the form, the lender has a 60-day window to check your tax records.

Notice that the lender is having you sign the form at closing -- after the loan application has been completed. Thus, the form is not used for underwriting.

What, then, is the purpose of the form? If you do not make your mortgage payments when a loan is first originated the lender can be responsible for making good on the loan to an investor. If you don't pay, the lender will check your tax records to assure that your application claims are the same as what you told the IRS. If the numbers don't align then you could have big problems.

Presumably, in applying for your loan, you told the lender in writing about your tax issues. While 20 percent down is excellent, a credit score of 676 is passable but not great. For specifics, speak with your lender.

Lastly, you may be asked to sign IRS Form 4506, a request for tax return copies. With Form 4506, be sure to date the form and fill in lines 6 and 7.

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: May 23, 2008

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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.