Open mind requisite for reopened mutual fund

Q. My mutual-fund company is urging investors to invest in a fund that was closed for several years but has just reopened. That suggests to me that the fund company needs the money. Returns are not that hot for the fund. Should one invest in a once-closed fund?

- A.R., Chicago

A. At least nine closed funds have recently opened or said they will open, says Larry Solomon, research director for the No-Load Fund Investor, in Irvington-On-Hudson, N.Y.

"Some of the funds have seen their assets shrink," because of the market downturn, or have had heavy redemptions Mr. Solomon says. Other companies close and reopen a fund as a marketing ploy.

"Buy into a reopened fund for the right reasons," he says. Those reasons include solid performance, good management, and potential for future gain. In the case of a reopened small-cap fund, he suggests you avoid ones with assets over $500 million.

Q. My wife filed for bankruptcy in 1996 after an injury left her unable to work. She didn't include our $75,000 mortgage. The mortgage company initially reported on my credit report "account charged off due to bankruptcy."

After I asked for a correction, it has since been reporting "account closed," and I receive a letter every month from the lender threatening foreclosure. It is impossible for me to refinance or receive any credit. Can the lender continue to collect and charge late fees on a reportedly closed account? What recourse do I have?

- T.G.,

via e-mail

A. "Why are they sending you letters?" asks Tim Shmidl, a financial planner in Overland Park, Kan. "Is it a mistake, or are you behind with house payments?"

If it's a mistake, have a lawyer write the mortgage company to correct the error with the credit bureaus, Mr. Shmidl says.

If you are behind in payments, try to borrow the money from family or friends to bring the account quickly up to date.

If you can't come up with the money, you may need to sell the house before the lender forecloses, so as to recapture your equity. Of course, you'll have to pay what you still owe on the house.

If the mortgage lender forecloses and sells, you may get some equity back, but it will come at the lender's timing, which may be months away.

Questions about finances? Write:

Guy Halverson

The Christian Science Monitor

500 Fifth Ave., Suite 1845

New York, NY 10110

E-mail: halversong@csps.com