DEAR BOB: My husband and I have been following with great interest the letters in your column about dishonest mortgage lenders who don't honor their loan commitments. We also got railroaded by a lender but refused to become victims. Our home purchase was to close by April 15. The S&L committed to loan us $147,500 at 9.25 percent fixed interest for 30 years. But a few days before the scheduled closing, they notified us that the rate would be 10.5 percent. However, we didn't want to lose our home purchase, so we went ahead and closed the loan at 10.5 percent. But my husband wrote a letter accompanying the closing papers saying that we were signing under protest, giving the S&L 15 days to rewrite and rerecord the papers at 9.25 percent interest or we would sue the lender, its president, the loan officer and everyone else who had anything to do with the misrepresented loan for the $48,885.96 difference in payments over the 30-year loan life.

A friend who works at the S&L says the loan clerks panicked when each received our letter. A week later, our attorney wrote a similar letter to the same people notifying them of our intent to sue for damages due to their fraud and misrepresentation. On May 4, the loan officer phoned to say the S&L agreed to rewrite our loan at 9.25 percent. We quickly signed the new papers, which were recorded on May 11.

I thought you and your readers should know that when being nice doesn't produce results, getting tough with the lender can have the desired effect. -- Ruby A.

DEAR RUBY: Thank you for sharing your letter. In the last few months, mortgage lenders have taken unfair advantage of thousands of home loan borrowers. Most people did not fight lenders who advertised specific loan terms and then refused to deliver.

While your strategy might not work with every lender, it put you in the driver's seat with everything to gain and virtually nothing to lose because you already had a loan needed to purchase your new home. The $135.80 monthly payment difference may not seem significant, but the additional $48,885.96 total over the mortgage's 30-year life cannot be ignored.

The S&L's top officers obviously decided it would be fair cheaper to rewrite your loan at 9.25 percent interest and to keep it in their portfolio than to fight you in court. That's still a very good loan for the lender, far above the current 7.5 percent average cost of funds. Congratulations to you and your attorney for not letting the lender play a dirty trick on you.

DEAR BOB: Please help us get out of a $17,000 legal mess. In early 1986, we listed our home for sale. Within a week, the real estate agent brought us an acceptable purchase contract that contained a finance contingency clause giving the buyer 30 days to arrange a new mortgage. During the 30 days, a second buyer learned about our sale and offered us $5,000 more for the house if the first buyer didn't complete the purchase. After the 30 days passed and the first buyer had not obtained the mortgage, and since both contracts said "time is of the essence," we went ahead with the second backup buyer who had the cash to quickly close the sale. But the day before transferring title to the second buyer, the first buyer notified us he had arranged a mortgage. Since he was two weeks beyond his 30-day deadline, we went ahead and closed the sale to the second buyer. Then the first buyer sued us in court for $50,000 damages. To our shock and that of our attorney, the judge awarded him $17,000, even though he was two weeks late in meeting his mortgage deadline. Our attorney advises an appeal. Your opinion please. -- Wally R.

DEAR WALLY: Anything can happen in a trial court. That's why we have appeals courts to correct errors made during the trial.

As your attorney probably explained to you, the legal phrase "time is of the essence" doesn't always means contract deadlines must be met exactly on time. There is an old legal principle: "The law abhors a forfeiture." This rule often results in courts failing to strictly enforce a "time is of the essence" clause if a forfeiture would result.

To enforce a "time is of the essence" clause in a contract, the party seeking to cancel the contract because of the other party's nonperformance on time must usually give notice of being ready, able and willing to perform on time. Then a delay in performance by the late party will result in contract forfeiture. However, there are no hard and fast rules in this area, so a real estate buyer or seller cannot tell with accuracy how a trial court might rule.

If I were in your position, I would appeal the adverse trial court ruling. Thirty days is plenty of time to obtain a mortgage commitment. The first buyer, if necessary, should have requested a time extension. Since you apparently thought the first buyer wasn't going to complete the purchase and was in breach of contract, it appears you were justified in selling to the second buyer at a higher price.

Your situation shows why backup offers cause so much trouble. Without a written release from the first purchase contract, a seller who sells to a backup buyer acts at his or her peril, as you discovered.

DEAR BOB: We are in the process of buying a house. The title insurance company asked us to fill out a detailed "statement of identity" form, which asks questions about our previous addresses and other information that is none of their business. They say if we refuse to fill out this statement, they won't insure the title. When we bought our current home about five years ago, we didn't have to fill out such a form. What's going on? -- Charles S.

DEAR CHARLES: Before issuing a title insurance policy, the title insurer must check the title status of the property. In addition, a name check must be run on both the seller and buyer to see if any liens have been recorded against the individuals.

If you have an income tax lien or a judgment lien, it could automatically attach to the property the instant you purchase it, thus gaining priority over a new mortgage. Or if you are in bankruptcy, the house being acquired could automatically become subject to bankruptcy court jurisdiction.

Title insurers use statement of identity forms if the buyer or seller has a common last name such as Smith, Johnson, Wong, Anderson or Jones. Then the title officer cross-checks any recorded liens and eliminates liens that don't apply to the buyer and seller. Since I have an uncommon name, I have never been asked to fill out such a form. But I can understand your unhappiness. Just provide as much information as you wish, but don't be surprised if the title insurer calls to ask for more details if liens are recorded against persons with similar names in your county.

DEAR BOB: A developer is proposing a new "equity co-op" apartment building where residents would own their moderate-income unit. But the big drawback is that when we eventually decide to sell, we would have to sell our unit back to the cooperative association at a very limited profit. This takes the investment incentive out of buying. What do you think of this idea? -- Julio P.

DEAR JULIO: Not much. Artificially limited resale profits take away a major ownership advantage because real estate is usually an excellent inflation hedge. But the advantage of equity co-ops is they provide affordable housing. I wouldn't buy into such a project unless I couldn't find any other suitable housing.

DEAR BOB: We are considering selling our home to friends. However, they only have about $22,000 cash down payment to buy out our $40,000 equity. We would have to carry back an $18,000 second mortgage and they would assume our $62,000 FHA mortgage. But I am concerned about the safety of our second mortgage. The wife has a steady job as a secretary, but the husband works in construction and is often out of work for months. I remember my parents telling me about during the Great Depression how second mortgage investors got wiped out. Does this look like a safe second mortgage to you? -- Tina W.

DEAR TINA: Adding up the $62,000 FHA first mortgage, plus the $18,000 second mortgage and the $22,000 cash down payment means your home is selling for $102,000. The buyer's $22,000 cash down payment is 21 percent of the sales price. The total loan-to-value ratio is 79 percent. That is considered safe by most mortgage lenders.

Second mortgages are much safer investments than during the Great Depression. In those days, first mortgages were usually "interest only" for only five years and the lenders frequently refused to renew them, thus causing foreclosure and wiping out any second mortgage. But that can't happen with your FHA first mortgage, which is fully amortized and has no balloon payment.

When I started writing this column about 12 years ago, I received many letters like yours, especially from the very conservative New England states, where a second mortgage was still considered a sign of approaching bankruptcy. But now most people understand second mortgages can be very safe, especially in situations like yours where the home buyer has a large amount of equity.

However, let me suggest you don't let your borrower ever get behind on monthly payments to you or on the first mortgage. Every few months contact the first mortgage lender to be sure payments are being made on time. FHA lenders and VA lenders often let their mortgages get behind six months or longer before taking action. As a second mortgage lender, if the first mortgage payments are in default, you can pay them, and then declare your second mortgage in default to begin foreclosure. Consult a real estate attorney for further details.

DEAR BOB: We accepted an offer to sell our home, but it contains a contingency for the buyer to obtain a mortgage. The real estate agent tells us the buyer is having trouble getting a loan due to credit problems. However, the agent has another buyer who will pay us slightly more for our house. The problem is that the first buyer refuses to cancel his purchase contract and, as we've waited over a month for him to get a mortgage, we don't want to lose the second buyer. What should we do about the second buyer who wants to make a backup purchase offer? -- Bruno P.

DEAR BRUNO: Shame on the real estate agent for not insisting a deadline be included in the offer bid for the buyer to obtain a mortgage commitment. When no exact time is specified, if the issue winds up in court a "reasonable time" would be allowed. In my opinion, waiting 30 days is plenty of time to arrange a mortgage loan commitment.

Encourage the second buyer to make a backup purchase offer. But only accept it contingent upon your being released from the first offer. If the first buyer continues to refuse to cancel his purchase contract, consult your attorney. He or she will probably suggest bringing a declaratory judgment lawsuit to compel the first buyer to release his purchase rights to your house.

By the time the second buyer is ready to close the home sale, the first buyer will either have obtained a mortgage or given up. Abandonment of the contract is valid grounds to rescind the first sales contract. I presume you have offered to return the first buyer's earnest money deposit. If not, I urge you to do so immediately. Ask your attorney to explain further.

DEAR BOB: Over two months ago, we listed our home for sale with a highly recommended real estate agent. Since then, she has done virtually nothing to sell our home. We phone her at least once a week, but she always has an excuse why she hasn't shown our home to prospective buyers. What really bothers me is I suspect she never submitted our listing to the local multiple listing service because no real estate agent from another firm has shown our house. Our listing was on the MLS form. However, when I visited the MLS office I was told the listings are confidential and even I, the owner, cannot be told if my listing is in the current MLS book. Can I cancel my listing to list with a better agent? -- Melva W.

DEAR MELVA: If you cancel your exclusive listing without justifiable cause, the listing agent might sue you for the full sales commission even though no sale has occurred. Be very careful. Consult your attorney.

Lack of due diligence is the most common reason to cancel a home sale listing. If a lawsuit develops, you should be prepared to prove the agent did not use due diligence to sell your home. Failure to advertise the home, hold weekend open houses, and submit the listing to the local multiple listing service is evidence of lack of due diligence. I suggest you talk to the top officer at the MLS to determine if your listing was submitted. If not, you probably have grounds to cancel your listing. Also talk to the agent's broker to learn why your home isn't being shown more often.

DEAR BOB: We want to refinance our home loan to get rid of our 11.25 percent interest rate mortgage. A mortgage broker we contacted says he can get us a fixed interest rate mortgage at 9.75 percent. That is much lower than other lenders we have consulted. But this loan agent wants us to pay a $225 appraisal fee plus a $450 loan application fee. He says his company requires these fees to know we are serious. However, he says it will be at least 30 days before he can give us a firm loan commitment. This sounds shady to me. What is your opinion? -- Jake L.

DEAR JAKE: I agree with you. It is reasonable for a mortgage lender to charge an advance appraisal fee. But a large advance loan application fee is unnecessary and, in some states, illegal. Mortgage brokers have earned a very bad reputation for not delivering the loans they say they can obtain. You can't be too careful when dealing with mortgage brokers. Many are excellent, but a few have given the industry a badly tarnished reputation.

DEAR BOB: My credit report has some blemishes from a few years ago. But now I earn about $45,000 per year and pay all my bills on time. How can I buy a modest town house without having the mortgage lender run a credit check? -- Kathleen S.

DEAR KATHLEEN: That's easy. Buy a town house with an existing assumable mortgage such as a VA or FHA home loan. The cost of assuming VA or FHA financing is about $45.

DEAR BOB: After we closed the purchase of our home, as the real estate agent handed us the keys, she suggested we have the locks rekeyed. She even gave us the name of a locksmith. He wants $15 to change each lock. Do you think we should have this done? -- Ruth T.

DEAR RUTH: Yes. You have no way of knowing who has the keys to your house. Having each lock tumbler rekeyed is cheap peace of mind insurance.

Readers with questions should write Bruss directly at P.O. Box 6710, San Francisco, Calif. 94101.