Q. We bought a foreclosed house in 1995 in which the garage had been converted to an illegal family room. At closing, we had up to 60 days to have the garage brought up to code either by putting it back to a garage or making it a legal family room. We changed it back to a garage in 30 days.
We got all the proper permits and a new certificate of occupancy to give to the town. We did everything right.
Well, 16 years later, I am on a website for our county and find out that they have us down for the extra 550 square feet of living space that we had taken off.
I called the town, and was told they will come out to measure. The tax assessor then told us that we cannot get back taxes that we paid. However, he did say that we were charged for the extra 550 square feet plus a basement that I do not have (we have a crawlspace) for all this time.
Do we have any legal rights?
A. Let me address this in two parts.
First, the future. I strongly suggest you take immediate steps to at least have the assessor’s records changed. If the assessor’s records are incorrect, they must be corrected.
Second, the past. It is often very difficult — if not impossible — to get refunds from local or state governments. They are often extremely bureaucratic and, because their funds are low, are reluctant to part with a single dollar.
You should, however, talk with a local attorney. You may have the right to challenge the assessor and get a refund. That will depend on state law in the jurisdiction where your property is located.
Q. In a recent column you mentioned that the government in some cases is offering $1,500 to homeowners who turn over their keys and accept a deed-in-lieu instead of going through foreclosure. I can see where this is advantageous to all parties involved. How does one find out about this program?
We are getting ready to sign our deed back but of course no mention was made of giving us any monies. We left the place sparkling, with new paint, new carpet and bought a new washer and dryer.
The mortgage servicer has asked us also to sign a promissory note to the private mortgage insurance provider for $1,000 at no interest over 18 months.
We paid PMI of $60 each and every month for seven years. Is this an unusual practice? He said it would help with the lender accepting our deed-in-lieu offer, so I said OK, but now after some thought, I think it is not wise or needed.
A. I did a website search and found some information about a government program called the Home Affordable Foreclosure Alternatives, or HAFA. Under this program, borrowers can receive $3,000 in relocation assistance when they successfully close on a short sale or a deed-in-lieu of foreclosure.
A short sale is where your lender allows you to sell your house for less than you owe on the mortgage. Some lenders will release you completely from any deficiency; others will insist that you make some sort of payment to the lender, over and above what the lender receives from the sales proceeds.
In a deed-in-lieu, you give up your house to the lender, and no foreclosure is necessary.
Under the federal program, there are several requirements, such as you have to live in the house (or have lived there) in the last 12 months; you have a documented financial hardship; your first mortgage is less than $729,750; and you obtained your loan on or before Jan. 1, 2009.
For more information, go to makinghomeaffordable.gov.
I question the necessity of having to pay an additional $1,000 for private mortgage insurance premiums.
However, if you have already signed a written agreement, I am afraid it may be too late to back out of the deal.
