DEAR BOB: In recent months, there have been several letters in your column from readers who can't make their monthly mortgage payments and who were trying to deed the property to the mortgage company. My problem is similar, but I have about $11,000 equity in my $130,000 condo, which I hate to lose. There is a glut of condos for sale in my area, and the two fine real estate brokers who have listed my condo for sale in the last six months failed to bring me any purchase offers. I am now almost $4,000 behind in my mortgage payments because of unemployment and illness. Refinancing my $119,000 mortgage is out of the question because I just started back to work. I wrote to the mortgage company about paying off the $4,000 at $500 per month, but it has refused and has already started foreclosure. What should I do? -- Kurt R.

DEAR KURT: Recently, I have received many letters similar to yours where the borrower has difficult choices to make, especially if the mortgage lender is uncooperative. It appears your condo has declined in market value since you bought it, putting you in a precarious situation. Here is a list of possibilities to consider:

(1) Borrow the $4,000 to reinstate the mortgage at a bank, savings and loan, credit union or finance company. Unless you have terrible credit, you should be able to borrow this amount on an unsecured basis. Or if you have Visa or MasterCard accounts, perhaps you can get the credit limit increased to $4,000 and take a cash advance to reinstate your mortgage.

(2) Sell the condo for nothing down to a reliable buyer who can either qualify for a new mortgage or assume your old mortgage. Be sure you are released from any further liability, in case the buyer defaults on the loan.

However, since you have very little equity left, the typical real estate agent's sales commission of 6 percent on the $130,000 sales price is about $7,800, which would mean you would have to come up with at least $800 out of your own pocket to sell the condo. Perhaps a sympathetic agent will sell your condo for a $7,000 fee.

(3) Deed the condo to the lender in return for a release of liability for any deficiency loss the lender might incur. This is not easy because lenders do not want to own condos (which are a major problem, in most areas, because of the glutted marketplace). As a last resort, you could record a deed in lieu of foreclosure or quit claim deed to the lender, which the lender will probably accept rather than send it back. Consult your attorney for further details.

DEAR BOB: About two months ago, we sold our old home, and this month we closed the purchase of a new home. We plan to use the "rollover residence replacement rule" you often discuss to defer the tax on our sale profit of about $140,000. However, we bought our new home in a brand new subdivision at a bargain purchase price before the developer built the first house. He has done a great job and we can sell our new house for an immediate $25,000 profit. But a friend told us we would have to pay tax on this profit. Please clarify if we could defer tax on our $140,000 profit, can we also defer tax on our $25,000 profit if we sell our new home? -- David P.

DEAR DAVID: Internal Revenue Code section 1034, the "rollover residence replacement rule," can only be used once every two years unless your second principal residence sale involves a job location change that qualifies for the moving expense tax deduction. To qualify for the moving expense tax deduction, your new job site must be at least 35 miles further away from your old home than was your old work location.

To summarize, unless you recently made a job change that qualifies for the moving expense deduction, you'll owe tax on the $25,000 profit if you sell your new home. Consult your tax adviser for more information.

DEAR BOB: Some time ago you ran a question from a reader who wanted to sell her $500,000 building and carry back a second mortgage for retirement income. But you advised her not to do so because the new installment sale law would tax most of her profit in the year of the sale. That is very similar to my situation. I want to sell my free-and-clear home for about $350,000 and take back a first mortgage. Since I am not eligible for the "over 55 rule" $125,000 tax exemption, would you give me the same advice not to carry back the mortgage financing for a buyer? -- Nori V.

DEAR NORI: No. The 1986 Tax Reform Act's installment sale provision is a tax disaster for property sellers who want to carry back mortgage financing. Congress made a bad mess by taxing most of a real estate seller's profit in the year of sale even if the buyer makes only a small down payment.

However, you fall within one of the three exceptions: (1) sale of an operating farm, (2) sale of property below $150,000, and (3) sale of "personal use property," such as your residence. You can sell your residence, accept any down payment you wish and pay tax on your profit as you receive it from the buyer. Ask your tax adviser to explain further.

DEAR BOB: My wife and I want to buy a home but are unsure if we can qualify for a mortgage. We have several credit cards, but we pay them in full each month. However, we have two auto loans that cost us about $425 total per month. Our monthly gross salaries are almost $3,600. What size mortgage can we get? -- Rick R.

DEAR RICK: Each mortgage lender has different qualifying rules. If you are rejected by one lender, don't feel bad. Go down the street to another lender. The easiest lenders to borrow from are those who keep mortgages in their loan portfolios. But the toughest lenders are those who sell their loans in the secondary mortgage market to Fannie Mae and Freddie Mac , which, in my opinion, have unreasonably tough, inflexible qualifying standards.

For example, Freddie Mac's current loan qualification rules state the housing expense cannot exceed 28 percent of gross income and total loan payments cannot exceed 36 percent of gross income. Using these tough rules, you can qualify for a home loan with monthly payments up to about $1,008. This will qualify you for a 30-year adjustable rate mortgage of about $140,000 or a fixed interest rate loan of about $100,000 at current interest rates.

However, there are more flexible mortgage lenders, some with qualifying ratios as high as 40 percent and even 50 percent if you have excellent credit. Work with a knowledgeable real estate agent who can suggest lenders who will approve your loan based on your qualifications.

DEAR BOB: I recently read your explanation of Starker "delayed" tax-deferred exchanges where one property is sold, the proceeds are held in trust, the second property to be acquired is designated within 45 days and the acquisition is completed within 180 days. But a friend told me I can sell my home and take up to two years to reinvest the proceeds in another house to defer my profit tax. Who is right? -- Tom F.

DEAR TOM: We're both right. But we're talking about apples and oranges. A Starker delayed tax-deferred exchange refers to investment or business property, such as apartments and shopping centers.

There is no need to make such an exchange of your personal residence for another residence because IRC 1034, the "rollover residence replacement rule," requires tax deferral when you sell your home and buy another of equal or greater cost within two years before or after the sale.

Incidentally, if you acquire a replacement home of equal or greater cost, you don't need to invest all the cash from the sale into the replacement home. To illustrate, you can sell your old home for cash and buy a qualifying replacement home for nothing down with a VA home mortgage and pocket the tax-deferred cash to spend as you please. Ask your tax adviser to explain further.

DEAR BOB: I'll bet you are on the secret payroll of the Realtors because you always advise people to sell their homes with the help of Realtors. Last year I sold my home without a real estate agent and saved a commission of at least $6,000. My attorney handled the sale details and all went smoothly. I spent about $500 on newspaper ads, but that's far cheaper than paying a $6,000 commission. You should admit to your readers you are on the payroll of the Realtors. -- Jess R.

DEAR JESS: Sorry to disappoint you, but I am not on the payroll of the Realtors, nor any other real estate organization. The only paychecks I receive are from Tribune Media Services, which distributes my columns to newspapers.

Most homeowners benefit from professional marketing help. Many do-it-yourself home sellers eventually list their home with a real estate agent after trying to sell their homes alone for about a month. One costly mistake, such as underpricing a home, can wipe out the "commission savings" of selling without an agent. In these days of escalating consumer awareness, I cannot recommend a home owner sell without professional help.

DEAR BOB: We are considering listing our rural land for sale. A neighbor recommended her cousin, a real estate agent, so he came out to look at our property. He said he would take a six-month listing if we would pay a $1,000 advance fee for advertising. This would be credited against his 12 percent sales commission when he sells our property. Is this customary to charge an advance listing fee? It struck me as rather odd since the agent stands to earn at least a $20,000 sales commission when he sells our property. -- Ruth G.

DEAR RUTH: Most reputable real estate agents do not ask for an advance fee. In some states, such fees are illegal. What would happen to the $1,000 advance fee if the agent doesn't sell your land?

The 12 percent sales commission the agent requests is above the customary 10 percent fee for land sales. I suggest you interview several other agents before listing your land for sale with the best one.

DEAR BOB: My husband and I recently got trapped by a dishonest mortgage broker. Is there anything we can do about it? After the seller accepted our offer to buy a home, the real estate agent recommended a mortgage broker. We didn't learn until later that the mortgage broker is the agent's brother (they have different last names). We paid him a $40 fee with our loan application and he said our credit and income verified excellent so we would have no trouble getting a mortgage. Then we paid him a $200 appraisal fee. Almost a month later, after the fixed interest rates jumped, our loan was approved by a local S&L. But the mortgage broker charged us a 3 percent loan fee whereas if we had gone directly to the S&L we would only have been charged 2 percent. To make matters worse, the mortgage broker refused to give us our appraisal, so we could go to another lender with a lower interest rate. As time ran out, we didn't have time to get another appraisal for the other lender, whose interest rate is about one-half percent less. Do we have any recourse against this mortgage broker? -- David R.

DEAR DAVID: I am getting many letters like yours about mortgage lenders, especially mortgage brokers, who mislead borrowers. The best lenders lock in the interest rate at the time of the loan application, but the worst lenders, like yours, wait until the loan is approved (often after interest rates have risen). Borrowers can best protect themselves by dealing only with lenders who lock in the interest rate at the time the application is submitted.

Your situation is a good example of why the borrower who pays for an appraisal should be given a copy. When borrowers pay an advance appraisal fee, they should do so only on the condition the lender agree in writing to give the borrower an appraisal copy as soon as it is received from the appraiser. Perhaps this will stop the lender abuses of appraisals like you suffered. Since you already paid for the appraisal, small claims court is the place to sue for a refund of your $200 because you didn't receive the appraisal you purchased.

Since you had to take the loan because your home purchase was hanging in the balance, your recourse now is to possibly sue the mortgage broker and lender for misrepresentation and fraud because of unreasonable delays that cost you higher interest rates. The statutes and case law on this issue are very sparse, so you may need to talk to several attorneys before one will take your case. Your damage, of course, is the half percent higher interest you'll pay over the 30-year loan life. On a $100,000 loan, that's $37.97 per month, or $13,669.20.

DEAR BOB: For many years, I have been an enthusiastic investor in income properties, mostly apartments and single-family rental houses. But the 1986 Tax Reform Act has taken away my incentive to buy any more rental property. My investor friends feel the same way, especially since Congress double-crossed us (after encouraging us with tax incentives to invest) and took those incentives away. Am I reading the new tax law correctly or am I missing something? Also, since my wife and I own our properties together, if we get a divorce, could we each get a $25,000 passive loss deduction for our shares of our properties? -- Keith K.

DEAR KEITH: You are understanding the 1986 Tax Reform Act correctly. Unless you live in an area where properties are appreciating in market value, there isn't much tax incentive to invest in real estate. Since the new tax law was passed a year ago, I've been suggesting purchase of investment "fixer property," which can be upgraded at a lesser cost than its increased market value due to the improvements. I like run-down, but sound, and well-located single-family houses because fixing up these properties usually pays off handsomely.

Under the new tax law, two unmarried investment property coowners can each deduct up to $25,000 of passive losses from rental property ($50,000 total), whereas a married couple is limited to $25,000 of losses to offset ordinary taxable income. Consult your tax adviser for details.

DEAR BOB: In our area, most homes sell with VA or FHA financing. But as I write you, the VA wants home sellers to pay a 3 percent loan fee. My home will sell for slightly more than $100,000, but why should I pay a $3,000 loan fee for the buyer's VA mortgage? The real estate broker says it's customary. Is this true? -- Myron C.

DEAR MYRON: Yes. However, contrary to popular misbelief, there is no legal reason a home seller cannot provide in the sales contract for the VA buyer to reimburse the seller for any VA loan fee paid. Federal law (38 CFR 36.4312) prohibits only a VA lender from assessing the borrower more than a 1 percent loan origination fee. A recent California court decision, Ganey vs. Doran (236 Cal. Rptr. 787), approved a VA buyer reimbursing the seller for VA loan fee payment. Consult your attorney for full details.

DEAR BOB: I came to the United States eight years ago from Mexico. I have a wonderful job as a salesman, earning about $60,000 a year, and about three years ago, I got married. We want to buy a house in a Hispanic neighborhood. But we are having trouble getting a mortgage. We signed a purchase contract to buy a house but, as you often suggest, we put a finance contingency clause in the offer for us to get a mortgage. Our real estate agent, who doesn't speak the best English, has been trying to get us a mortgage. We have filled out loan applications with three different lenders, but they keep coming up with problems. I know they are trying to avoid illegal discrimination against us, but they seem unreasonable. One wanted to see my immigration papers, which I provided, but they rejected the loan because I have not worked for the same company for two years. Another refused to count my wife's part-time job income because she has only been on the job for two months. The other came up with a very low appraisal on the house we want to buy. What should we do to get a mortgage loan? -- Carlos R.

DEAR CARLOS: As I'm certain you realize, you are a victim of illegal discrimination. When lenders don't want to make a loan, they have devious ways to make it so tough to get approved the borrower usually gives up. I urge you not to do so because what the lenders are doing is wrong.

Get tough with the lender. Phone the lender's president. You probably won't get through, but you will get to talk to an assistant who can get favorable action for you. The squeaky wheel gets the oil, so complain loudly.

You also can file a complaint against the lenders for illegal discrimination. Contact the nearest office of HUD (Housing and Urban Development) for details.

Unfortunately, illegal "redlining" that you encountered still exists among mortgage lenders and, even worse, among fire insurance companies. But instead of saying they don't make loans in a neighborhood, lenders come up with unreasonable excuses until the borrower gives up and goes away. I hope you will persist until you get your loan.

DEAR BOB: Many times, you have said a lease with option to buy is the best way to purchase a home. I have read the newspaper ads and talked to many real estate agents but I haven't been able to find a house that can be bought on a lease-option. As we only have about $3,000 cash, a lease-option with a rent credit toward the purchase price would be perfect for us. How can we find these lease-options you often mention? -- Georgia T.

DEAR GEORGIA: The best place to look for lease-options is in the "houses-for-rent" section of your newspaper's classified ads. If the house is one you want to buy, after you have inspected it with the owner, ask if he or she would consider a lease with option to purchase. Seek the longest possible term, such as two or three years. One year is the minimum. In many cities, the home-rental market is very soft and owners will gladly approve a lease-option.

Other ideal lease-option houses are those that have been listed for sale several months and are now vacant. Retiree sellers also are good lease-option candidates. With persistence, you can acquire a home on a lease-option. That's how I bought my home, and you can do so, too.

DEAR BOB: I recently retired from my sales job and think I would like to sell real estate part time. Which states do not require a license exam? At age 67, I am too old to study and take a test. -- Cyrus H.

DEAR CYRUS: Every state requires a real estate sales license exam. If you won't devote full time to real estate sales, it would be best if you find some other line of part-time work.

DEAR BOB: I own a rental house that is now vacant. I am having the house fixed up, and haven't decided whether to rent or sell it. The neighborhood seems to be declining; the neighbors aren't keeping their properties up very well. But if I sell, I will have a huge tax to pay. What do you advise? -- Vern P.

DEAR VERN: If the neighborhood trend is unfavorable, that's the time to sell regardless of the tax consequences. But if the long-term neighborhood prospects look good, then don't sell. Before you decide, seek expert opinions of real estate agents active in the neighborhood and local business people, especially a nearby banker who is sure to tell you any negative neighborhood factors. Then write down lists of the pros and cons of selling. You'll soon be able to decide if you should sell.

DEAR BOB: Several months ago, you said a real estate agent must present all purchase offers, even those that are very low, to a home seller who has listed a home for sale. I am a licensed real estate broker and haven't found such a law. Several times, I have refused to write up low offers from buyers who were just testing the waters. Please tell me where I can find the law requiring me to present all offers. -- Paul R.

DEAR PAUL: When a real estate agent accepts an exclusive listing, the agent and seller become obligated to each other under the laws of agency. The agent thereby incurs a fiduciary duty to the principal (the seller) to report all material facts that develop during the listing term. A purchase offer, no matter how low, is a material fact that must be reported to the seller.

Shame on you for not writing up and presenting those low offers. As an agent, you may not know how desperate the seller is, and even a low offer might be accepted. Or it might lead to a counteroffer that the buyer will accept. You could lose your license for breach of your fiduciary duty to the seller and the buyer. In the future, write up and present to the seller all offers. Ask a real estate attorney to explain further.

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