DEAR WILLIAM: Fannie Mae is the only reverse-mortgage lender offering these special home-purchase loans, which require no monthly repayments while you live in the home. But you will need to make a substantial cash down payment.

Purchase Bob Bruss reports online.

The balance of your home purchase can be paid for with a reverse mortgage with no monthly payments. Details are available from any Fannie Mae reverse-mortgage lender. To find local lenders in your area, on the Internet go to www.reversemortgage.org and click on the state where you want to buy your retirement home.

WHY DON'T FICO SCORES CONSIDER INCOME AND SAVINGS?

DEAR BOB: For the last several months, I've been shopping for a refinanced mortgage. But you wouldn't believe all the "bait and switch" loan sharks I've encountered. After filling out their loan applications, they checked my excellent credit and my FICO (Fair Isaac and Co.) score. It was originally 725 but has now gradually declined, as I have had nine credit inquiries in the last few months. But I have substantial income plus over $500,000 in savings, IRAs and stocks. However, FICO doesn't consider that. Don't you think FICO scores are very unfair? Jonathan F.

DEAR JONATHAN: Yes. FICO scores attempt to predict your probability of making loan payments on time. Past history is the best predictor.

However, just because you are wisely shopping among many mortgage lenders for the best terms shouldn't hurt your FICO score. But it does. FICO thinks if you have too many credit inquiries you are borrowing too much and maybe planning to file bankruptcy.

FICO scores should consider your ability to pay if adversity hits, such as unemployment or illness. But FICO scores don't even look at your income and assets.

If you can develop a better more accurate method to predict probability of on-time loan payments, taking into consideration income and liquid assets, you can earn a zillion dollars, just as the founders of FICO have done. Until that happens, we consumers must live with the current imperfect FICO scores.

MUST HOME SELLER DISCLOSE A SHRIEKING NEIGHBOR?

DEAR BOB: I am about to sell my house. The main reason is the next-door neighbor nuisance. She is an elderly woman who shrieks and screams at invisible people all night. The police and mental health workers say they can do nothing unless she becomes a threat. Am I obligated to inform prospective buyers of this nuisance? If so, I probably won't be able to sell my house. If I do not tell prospective buyers of this situation, what consequences could I face? Mr. C.M.

DEAR MR. C.M.: Yes. You must disclose the shrieking neighbor problem to prospective home buyers. The leading appellate court decision on this issue is Shapiro v. Southerland, (1998) 60 Cal.App.4^th 666, where the court ordered the seller to rescind the sale and return the buyer's money.

That situation involved a home seller who failed to disclose the noisy next-door neighbors who caused frequent disturbances. For full details, please consult a local real estate attorney.

The new Robert Bruss special report, "Secrets of Tax-Free Reverse Mortgage Income for Senior Citizen Homeowners," is now available for $4 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet download at www.bobbruss.com. Questions for this column are welcome at either address.

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