Adam Brett - Fullerton, California Realtor

Q. In 2005 I bought my condo in South County for $305,000; it is currently worth $170,000. I have a 1^st

^{and 2nd interest-only loan both at 7%, both adjustable, and with the second coming in as high as 11%. I have kept up with my loans but I can’t get any help refinancing. I tried to refinance in 2006 but the banks told me to wait because time were tough. At this point I can’t afford my mortgages since they come in at roughly $2,000 per month but after the second adjustments I will be paying close to $3,000 a month and that would be impossible. My condo is a one-bedroom and the market watchers say it could be up to ten years for it to fully rebound. Should I short-sale or attempt to wait it out? I’ve managed to keep everything in check for this long I do not want to ruin my credit just to get some help.}

A. You are a prime candidate for a mortgage modification. You have maintained a good credit score, are willing to stay in your home and can afford to make payments at your current market rate. The problem you may run into is that your loans are substantially higher in rate than the current market and can go even higher making them toxic. Also you lender may not own your loan, they may just service it. Hopefully they are becoming more willing to entertain modifications for people like you who are prime candidates.

Q. I want to purchase a home but I do not have sufficient funds for a down payment. If I get an

owner-financed mortgage, would I be able to apply for a bank-financed mortgage in a year or so and would the money I paid to the owner count as a down payment or would I still need a separate down payment with the bank mortgage?

A. I don’t think an owner financed mortgage is the best option for you, the problem occurs when you want to refinance to pay off the seller. The bank will view your request as a cash-out refinance. The current rules in place state that your new loan cannot exceed 75% loan-to-value. You home would likely have to gain a lot of value in a short amount of time and with the current market that seem unlikely. The only way this scenario works is if the seller will carry back for 10 years or more.

You should consider an FHA loan which will require only a 3.5% down payment.

This Saturday is Fullerton Fire Departments Annual Pancake Breakfast. The meal will be served from

7:30 am to 11:00am at Fire Department Headquarters located at 312 E. Commonwealth Ave.

Tickets are $4 per person and free for children under 2. The ticket includes pancakes, eggs, sausage or bacon and a beverage.

Proceeds from the breakfast will be used for the department's public education programs and for the Community Emergency Response Team (CERT), which trains residents to assist in overall disaster preparedness and recovery efforts.

There will also be informational booths presenting information on safety and fire prevention.

Orange County officials want to expand a home-buyer tax credit that they had not given out when home loans

went haywire during the housing boom.

The county is now eager to give out certificates to first time home buyers so that they get the federal tax break.

First-time home buyers who meet income and home valuation requirements, can get a credit for up to 15 percent of their mortgage interest. That’s in addition to a nationwide $8,000 first-time buyer credit that expires on December 1, and the regular mortgage interest deduction.

The county has just $300,000 remaining of the $1.5 million allocation it got from the state in July. The $1.5 million allocation translates to certificates based on a calculation that incorporates borrowers’ loan amounts and income-tax credit used.

Home buyers pay $300 to apply for a new certificate and $275 to keep one they have when refinancing. For more information, contact John McCarty at Urban Futures at 714-283-9334.

Nearly 500,000 property tax bills have yet to be mailed out in Orange county because of a glitch that asked some tax

payers to pay twice.

About 350,000 of the incorrect tax bills had already mailed out when the error was found, the county is expected to resume mailing out the new forms next week.

The bogus forms told local property owners that they still owed property taxs – even though they are already paid through their monthly mortgage payments.

Some property owners who pay their taxes into “impound accounts” as part of their monthly mortgage payment received standard tax bills. Normally, taxpayers with impound accounts get a similar-looking letter, but it doesn’t have return envelopes enclosed and also has the words “INFORMATION COPY” on it.

The Treasurer’s Office blamed the mistake on “a computer programming error.”