Realty Q&A; is a weekly column in which Lew Sichelman, a nationally syndicated columnist who has been covering the housing market for more than 40 years, responds to readers’ questions on real estate.
WASHINGTON (MarketWatch) — Question: Our neighborhood association owns a useless island in a river running by only two of the homes in the association. We are paying taxes on this island that most of us don’t even know is there. We want to donate or get rid of this property somehow so we don’t continue having to pay property taxes on it.
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There is no access to the island; it is swampland and nothing can be built on it. It could possibly be a bird sanctuary, but that’s about it. We are located in Elkhart County, Indiana. Do you have any suggestions or know where we could get some answers? —S.L., Goshen, Ind.
Answer: You suggested it yourself. If the island might make a good bird sanctuary, then see if the Audubon Society or some other wildlife conservation group might be interested in having it for, say, $1. If there is no interest, you might just be stuck with it. After all, a swamp isn’t a very attractive piece of property.
But since the island is part of a residential community, it is probably being taxed at the same rate as the rest of the community. You didn’t mention the island’s size, but if it is of any significance, your owners’ association should visit with a real-estate attorney to find out how to separate it from the mainland so the community owns two pieces of property, not just one. That way, even though the island will still be owned by the association, the tax on it should be much lower than the tax on the mainland property. Even at its highest and best use, it has little or no value.
Finally, here’s another thought: Perhaps the community can find its way out of this dilemma by turning the island into an amenity all residents can enjoy. Consider building a small walking bridge to the island and then a boardwalk through or around it with some wider spots where owners can sit and enjoy a quiet sunset or a few minutes of bird watching. As I said, just a thought.
Question: I want to get into the HARP program. The mortgage on my house is $800 per month. My income is $800 per month. The bank never heard of this program! Could you help me with this? —B.B., San Francisco.
Answer: The government’s Home Affordable Refinance Program is a key component of the Obama Administration’s response to the housing crisis (Realty Q&A;, March 11, 2011 ), so I am absolutely shocked that your lender has never heard of it.
HARP expands access to refinancing for families whose homes have lost value and whose mortgage payments can be reduced at today’s low interest rates. It helps to address the problems faced by homeowners who made what seemed like conservative financial decisions three, four or five years ago, but who have found themselves unable to benefit from the low interest rates available today because the value of their homes have declined below that of their existing mortgages.
I’d try again to talk to the company which services your loan. But make sure you speak with someone in loss mitigation as opposed to someone working in collections — or anywhere else within the firm, for that matter. If you strike out again, find a local housing counseling agency which can reach out to your servicer on your behalf.
Or try HOPE LoanPort ( www.hopeloanportal.org ) which is designed to help owners get a faster answer about whether they qualify for a loan modification with the help of a government-approved housing counselor. Working with the counselors on the portal is safe and secure. Thousands of owners have entered into the trial modification process through the site, which is supposed to be efficient and speedy.
Feedback
Leonard Baron, a real-estate lecturer at San Diego State University, writes:
“While the county can get a lien against only the property (Realty Q&A;, February 25, 2011 ) the homeowners association can sue owners for unpaid fees during the term of their ownership, even if the property is foreclosed upon by county or HOA. The HOA’s lien would not be “attached” to the property any longer; rather, the association would have an unsecured lien against the owner and the owner would remain liable for those fees until they are paid or the HOA writes them off (which they most likely would ... but not always).”
Nationally syndicated columnist Lew Sichelman has been covering the housing market for more than 40 years. MarketWatch readers are encouraged to send their real estate questions to him at lsichelman@aol.com . Answers will be presented in this column every Friday. However, because of the volume of e-mail he receives, he cannot answer every reader’s query.
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More Realty Q&A;
| April 8, 2011 | Emptying the 401(k) to buy a home with cash | |
| April 1, 2011 | Mortgage considerations when rebuilding | |
| March 25, 2011 | Get the builder to fix shoddy work before closing | |
| March 18, 2011 | Title-company error drains homeowner’s escrow | |
| March 11, 2011 | Foreclosure programs: What you need to know |
Mark Hulbert
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