Question: My lender has gone bankrupt but has not sold my loan to another lender. The interest rate continues to rise every month. How I can get the loan transferred and then modify the current loan into a fixed-rate loan?

Answer: As a borrower you can never get the loan transferred. The reason? While you own the house you don't own the loan.

A loan is a liability to you but an asset to whoever or whatever owns the loan. In the same way that you cannot force someone to sell a house because you want to move in, you cannot force someone to sell a mortgage.

The company which you see as your lender is, most likely, the "servicer" of the loan and not the owner. The loan may well have been sold to an "issuer" who packages the loan with other mortgages and uses it to create a mortgage-backed security that is then bought by investors. You must continue to make full and timely payments to the address where you send your money until advised otherwise. It might be wise to send payments electronically online so you have receipts showing when payment was made.

Also, you cannot force a lender to modify a loan. A modification is a contract alteration and contracts may only be changed with the agreement of all parties.

The way to dump the current loan if it cannot be modified is to refinance. Speak with other lenders about your options, especially the FHASecure program.

Question: I recently purchased a property that was sold as a two-bedroom home. Later I discovered that it's actually a one-bedroom, as the largest room is just that -- a "room" and not a "bedroom" because it does not have a closet.

Can we go after the seller, the seller's agent, or the appraiser for misrepresentation? If we decide to sell, we'd probably have to market it as a one-bedroom because a savvy buyer and/or his agent may realize that this is actually a one-bedroom. Should we add a closet? We'd have to eat the costs, which is not fair since we paid the asking price based on the fact that it was a two-bedroom property?

Answer: Have you ever been in an historic home? Often they have bedrooms with no closets. Instead, each room has a tall piece of furniture called an armoire where residents can hang their clothes. Today, we often use armoires as combination dressers and TV centers.

A room does need a closet to be a bedroom. Instead, what's generally required is a minimum square footage, a minimum height and a working window to provide natural light and ventilation. Typically the window sill for a bedroom in a new structure must be no more than 44 inches above the floor so that residents have an emergency exit. For specifics, contact your local building inspector.

Why is it that you think you have a claim against the seller, broker or appraiser? Did they put a fake door in the room to create the illusion of a closet? Were you prohibited from seeing the room? Banned from having a buyer broker? Prohibited from getting an independent home inspector of your choice? Do you not have any responsibility as a buyer?

Although some within the legal/industrial complex may disagree, the experience here is that most buyers and sellers, landlords and tenants act fairly and want to be treated fairly. When you have a situation which seems so outsized that it seemingly requires an instant trip to the Supreme Court, your first step should be to get more information, to better understand the problem. Most likely you'll save a lot of legal fees. And personal angst.

Question: I'm getting ready to enter the market to buy a home. I've heard about so many different terms lately my head is spinning! What do "closing costs" mean and who pays them?

Answer: Imagine that you're buying a $3 million yacht. You go to the yacht store, find one you like and then get in line at the check-out counter to pay your bill (remember, this is a fantasy, we're imagining here). The clerk rings up your tab and then adds $200,000 for the sales tax, shipping and handling.

The extra costs at the check-out counter above the purchase price are, essentially, closing costs. The situation at the yacht store is similar in real estate. In addition to the actual cost of the property, say $300,000, there are also taxes, lending costs, insurance, appraisals, legal fees, etc. that are collected at closing.

Who pays closing costs is often a matter of local tradition or, ominously, what the form says. However, forms can be amended and local traditions are not binding. The real way it works is this: Unless otherwise required by law, all closing costs are negotiable. In a strong sellers' market you can bet that the buyer will pay many if not all closing costs. In a strong buyers' market, the owner will likely offer a "seller's contribution" to off-set the purchaser's closing expenses. In many cases, if not most, closing costs will be divided between the parties.

The important point is that closing costs are typically negotiable. For specifics, speak with your real estate broker.

Question: I bought a single-family home this year in a neighborhood that is seeing condos and townhomes go up by the dozen. How does a city decide zoning? And does this mean I'm in a multi-family zoned area?

Answer: The value of real estate is determined by its highest and best use. Your property is as zoned single-family residential otherwise a builder would have bought it for future development.

As to how zoning is created, typically the local government has a master plan showing how it wants the community to evolve. The idea is to create orderly communities which limit congestion and pollution while maximizing habitability and tax revenues. For instance, the master plan may have areas of high density development and other areas which are essentially rural and undeveloped.

Master plans are subject to change and also there can be individual amendments through variances. In the end the process is political and hugely influenced by well-placed contributions and friendships. The reason? If an owner can get better zoning then the highest and best use of their property can change. The difference between one form of zoning and another can often represent millions of dollars in new profits to individual property owners.

There are communities which have no zoning rules and somehow seem to survive. There is also an effort now to enact "smart zoning" rules in many areas, a term which implicitly suggests that current zoning is, well, dumb.

Question: I have a landlord who is very "friendly" and likes to stop by and visit. I, on the other hand, really like my privacy. Am I obligated to let the landlord into my home?

Answer: No. The landlord should have access only for required maintenance, emergencies and in situations where adequate notice is given, say showing the property to an appraiser if the house is being refinanced.

The practical issue is this: You want to treat the landlord nicely because a good relationship with a property owner can be valuable if you need a repair or credit reference.

However, it may be that when next the landlord comes by you'll need to leave, or you'll have to get back to a project for work ("Gee, I'd like to chat now but if I don't finish this project I'll miss my deadline...."), or -- golly -- perhaps you'll have a fierce desire to discuss something which absolutely bores the landlord to the point where he cannot wait to leave. Have you ever looked into the details and subtleties of fish gills, typewriter ribbons or the Internal Revenue Code ... .

Question: I live in a small rural community, a place where estate sales and auctions are common place. I recently went to one where they auctioned off the owners' 1920's house. It appeared to need a lot of work -- at least cosmetically. And they sold it "as is." Is that wise?

Answer: It's certainly wise for the sellers and auctioneers.

In a typical auction properties are sold "as is," with no representations or warranties as to the condition of the property, no obligation to make repairs and no contingencies.

While people can and do make profits buying properties at auction, not everyone is successful. If you have an interest in auctions, especially foreclosures, then it would be wise to attend local auctions and to use a service that tracks local foreclosures, such as RealtyTrac.com .

In some cases, you may be able to buy from successful bidders, individuals who essentially are in the wholesale purchasing business and will sell individual properties to small investors or those who want a particular property as a residence.

If your idea is to buy and re-sell auctioned property, then you must buy with a discount that's large enough to cover acquisition, repair, holding and marketing expenses. In other words, the problem is not that an auctioned or foreclosed property may need repairs, rather the problem is that repairs and other expenses may cost more than expected.

Question: There's a vacant lot next to my mother's house. We've been toying with the idea of how great it would be to have that extra lot for gardening and maybe even a new stand-alone garage. Where would I go to find public records on who owns it?

Answer: Most probably the information is in your local property records office -- and, even better, it's likely that local property records are online. An excellent set of links to local property records can be found at the Property Assessment Directory .

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.