Dear Mr. Berko:

I bought 200 shares of US Airways at $52.60 last November and now have a good short-term profit. I’m concerned about the merger between US Airways and Delta and how it may affect the price of my stock. Please give me your usual straight-talk opinion of this merger.

Another issue: For tax and personal reasons, I’m buying my mother’s home and will rent it back to her. She has owned the home for 17 years. It has a mortgage balance of $48,000, and I’m paying her $202,000. Three banks have told me that I have to have title insurance for myself in order to get the mortgage.

The title policy will cost my mother $2,870, and I will have to get a policy that will cost $425. This doesn’t make sense to me after 17 years with no problems.

E.P., Boca Raton, Fla.

Dear E.P.:

US Airways Inc. (LCC-$57.05) doesn’t flap my wings, and a merger between these carriers should give wise investors serious cause to pause. If formerly bankrupt US Airways is successful in acquiring bankrupt Delta Air Lines Inc., I recommend that you sell your 200 shares quick as a bunny, then, while exhaling, (sell) short the stock.

The reason is basic high school math: When two minus numbers are added together, the result is a larger minus number. A merger of two failures is a recipe for disaster. Oh, LCC might move higher in the short term, but those two carriers are as different as cheese and chalk, and I’m willing to wager my mint-condition Barbie doll collection to a pound of turnips that the new and larger entity might be belly-up not too long after the next presidential election.

The management styles of LCC and Delta couldn’t be more oppugnant. Douglas Parker, chief executive officer of US Airways, and Gerald Grinstein, CEO of Delta, are as compatible as Brutus and Caesar. Grinstein and his boys are bitterly opposing the merger and are trying to convince creditors that Delta’s potential as a “stand-alone” carrier will provide better returns than they would receive from LCC’s bid, even if LCC raises the ante.

I suspect the merger will be approved, because the creditors believe that a bird in the air is worth two on the tarmac. But can you imagine the myriad turf battles this hostile merger will create, not the least of which are: Who will be the surviving CEO, how many employees will lose their jobs, and why is Joe being paid more for the same job responsibilities as John?

A tie-up of the two would create the largest airline in the world with $27 billion in revenues, 82,000 employees, 8,000 daily flights, 700 destinations and 800 aircraft. Neither Parker nor Grinstein has had notable success managing an airline, and to assume that either of these warring lads has the skill set to integrate a carrier of this size and complexity is folly.

As for title insurance, it’s an $18 billion a year fraud, and less than $75 of each policy is paid out in claims. Thanks to computerized record-keeping, the cost to search the records and verify a clean title is less than $30. In fact, today’s technology ensures that you have a better chance of winning the lottery than finding a default in your mother’s title. Heck, even if your mother refinances her mortgage, she will have to purchase a title insurance policy, despite the acknowledged absence of any new risks on the deed.

This is pure corruption. The bribes, gifts, plane tickets, shopping sprees, vacation packages and cash under the table to real estate brokers, mortgage brokers, etc. for steering business to rapacious title companies rival graft at the congressional level. Florida is one of the states where this greed and corruption is pandemic.

The only advice I can offer is to search the Internet. Several years ago, after I wrote about the high cost of title insurance, at least a dozen readers told me that they were able to save 40 percent to 50 percent by surfing various Web sites.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net.

© Copley News Service