Philadelphia Weekly

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Illness puts homeowner $3,000 in arrears

Benny Kass
Inman News®

DEAR BENNY: I need to write a "request for payment plan" letter to my homeowners association, but I don't know how to write an effective one. I owe several months of back dues totaling about $3,000, which includes attorney's fees and interest. I really need help on writing this letter. I have not paid because of major health issues in 2011 to date. --Liz

DEAR LIZ: Actually, your letter does not have to be formal, dramatic or emotional. Keep in mind that you are writing to the board of directors who are human beings just like you (or at least they should be).

The board wants to know if you have the ability to bring yourself up to date. You should know this also. If you do not believe you will have enough money to not only pay what is owed but also to keep current in the future, then perhaps you should consider selling your unit.

I don't mean to be harsh, but realistic.

Basically, your letter should say, "Here's my check for XX, which represents this month's condo fee for my unit. I propose to pay YYY dollars each and every month until the balance I owe is fully paid. In addition, I will pay the condo fee as it comes due every month. I had major health issues that caused financial problems, but I now am able to catch up."

How much should you offer? Again, it has to be a realistic number that you know you will be able to afford.

And if you are unable to make payments, you have a number of options: File for bankruptcy relief; sell your unit; or if you are over 62 years of age, consider obtaining a reverse mortgage.

DEAR BENNY: My husband and I signed a note for my nephew back in 2006 using my home as collateral. Since that time my husband has died, as well as my sister, who left her home to my nephew, and he is renting it out and paying the monthly mortgage on my home. I would like to know if my nephew can transfer the mortgage to his home, as it is paid for and has the same value.

My nephew renovated the home but due to homes not selling he started renting. He was trying to sell my sister's home to pay off the loan on my home. I would like to be able to be free to make other decisions, as it is a lot of expense and I have to keep up the yard work and pay all bills without any help. I've just turned 73 and am trying to look forward to what I need to do down the road. --Nora

DEAR NORA: Your nephew should immediately contact the company that services the loan (i.e., the company where he sends the monthly mortgage payment) and find out if it will be willing to transfer the loan from your house to his.

This would require a new transaction, which will include settlement costs and possible state or local recordation and transfer taxes. If your nephew is financially capable of carrying the new loan, then I suspect that this all can be accomplished.

You should make it clear to your nephew that while you were willing to help him back in 2006, you now need his cooperation. Basically, he has two houses, and should be able to get a new loan on one of them so that your house loan can be paid off.

DEAR BENNY: I am a 70 years old with a dedicated pension, an annuity that preserves it's principal even as the market fluctuates, IRAs that I must begin to draw down, and a mortgage on which I owe more than $133,000.

Since I will need to withdraw money from the IRAs, and since they are losing rather than increasing in value, I was considering withdrawing all of the funds from them (slightly over $215,000), rolling them over into a small money market account I have and then paying off the mortgage. I have no idea of how this will affect my tax liability or what other issues with which I should be concerned.

Can you help enlighten me? --Name withheld on request

DEAR READER: First, let me advise my readers that I will not respond to questions where no name is provided. However, if a reader requests anonymity, I will certainly honor that request.

You really should consult a financial adviser who can review your specific situation. I cannot provide legal or financial advice to anyone; my responses always have to be general in nature.