READER’S ATTEMPT TO MAKE AN EARLY HOUSE PAYMENT AS TAX DODGE FAILS

Q: I went to my mortgage bank on Dec. 31 to make an extra payment, so I could deduct more interest off my income tax return for 2007.

The cashier said the computer didn't take early payments. So she had to make it for January. And of course, I told her it had to be for December. She finally took the check and gave me a receipt, but it's marked for additional principal.

What should I do now so I can get the interest to take it off my income tax? -- M.P.

A: Nothing that I know of.

You can take, as an income-tax deduction, only mortgage interest you are legally required to pay and actually do pay. You weren't obligated to pay any further interest in December.

The bank's computer will send the IRS information about your 2007 interest payments, and I don't think it will include any extra amount.

Bank foreclosure need not

require owners' signatures

Q: My husband and I owned a house together. I had to move to a shelter because of abuse five years ago, and I haven't lived in the house since then. Meanwhile, he filed for bankruptcy.

Then, I drove past the house and saw a family moving in. It seems they bought the house from the bank since it had been foreclosed.

How could bankruptcy be filed on a property that has two names on the deed? And how does your home get sold by a sheriff sale or a bank sale without the signature of everyone on the deed? I think there was some fraud here. I never signed anything. -- X.X.

A: You signed a mortgage document years ago, which said that if the debt wasn't repaid as agreed, you would allow the lender to foreclose the loan and sell the house at public auction. That's just what they did.

You should have been notified, but perhaps your address went astray. You could have a lawyer investigate whether you're owed anything at this point, but it doesn't sound likely.

As for your husband's bankruptcy, that was his individual concern. It wasn't "filed on the property." Bankruptcy doesn't cancel a mortgage anyhow.

'Bumpable' home may

have already been bought

Q: When looking at a home I may be interested in, the status of the home is listed as "bumpable." What does that mean? -- Via e-mail

A: In other areas, that listing would be described as "sold but contingent."

It already has a binding sales contract on it. The buyers needn't complete the purchase, though, unless something else happens. Usually it's the sale of their present house.

Meanwhile, the seller has the right to keep the place on the market. If you want to buy it, those first buyers can be asked to firm up their deal, remove the contingency and agree to buy even if their own house isn't sold. If they can't do that, they must drop out, or bumped. Then, the sellers would be free to sell to you.

Lenders not likely to touch

owner with no equity

Q: Is it legal to borrow against real estate in which the borrower has no equity? -- K.

A: I suppose it could be legal. It would be pretty hard, though, to find a lender. A title search would show that the property was already pledged up to its full value, so that it wouldn't furnish any security.

Low assessment should

not affect bid on home

Q: I am looking to buy a house and the assessed value of the home is less than the selling price. Why is there such a big difference? If I make an offer on this house, can I only offer the assessed value? -- Via e-mail

A: No matter how careful and expert, a tax assessment is still only an estimate. Particularly if the area hasn't been reassessed in the past few years, it shouldn't be used as a guide to price. And then, some areas don't assess at full market value.

You could offer only the assessment figure -- you could offer anything you like. But it's wise to make your first bid close to what you'd really be willing to pay.

Find out: What are competing properties listed for, what have buyers been paying to live in that neighborhood, how long has the place been on the market and how anxious are the sellers for a quick deal. Those are the factors to consider, not the assessed value.

Edith Lank will respond personally to any questions sent to her at 240 Hemingway Drive, Rochester, NY 14620 (please include a stamped return envelope), or readers may e-mail her at ehlank@aol.com.