My mother-in-law is in skilled nursing facility under Medicaid. One of her daughters maintained residence in her home and made the mortgage payments for the last couple years. Now that daughter is moving out. I do not want to make the payments on the house. What is the best option? Don’t want to go through the whole process of having it appraised and sold since my mother-in-law cannot have any money in the bank. Another option is to allow the house to just default payment and the bank to take it over and take care of it. Any advice appreciated. Thanks.
If not, and if there is little equity in the home, you may want to simply let nature take it's course. The home will go to auction eventually as these things work through.
You might want to see an elder law attorney to check out the options here. If there is a lot of equity in the home, and the home could conceivably sell at a good price, then that cash would belong to your MIL in assets, and that's a GOOD thing. She would come down off Medicaid and would have funds to private pay in a better situation until those funds are gone.
I would see an attorney to find out the best options for you. Meanwhile check with a realtor about home value. Hope you'll update us about what you find are best option choices. Good luck.
Put the house up for sale. Keep good records on any out of pocket you incur. I unplugged all the appliances. I had a timer set to a lamp in the living room. Came on at 5, off at 11. I put the thermostate on 55 so the pipes did not freeze. When the house is sold, you should be able to get your out of pocket back. The proceeds will go to Moms care. Medicaid will stop, you spend down and then pick up Medicaid again.
Letting the house go back may also cause problems.
Igloo will see this hopefully and respond. She has a great deal of knowledge.
She sometimes recommends finding real estate agents who are experienced with selling houses where the owners are on Medicaid. She recommends getting inspections for repairs needed that are then given to the appraiser so that the FMV is more accurate than what local comps would indicate the value should be. This would all be arranged by the experienced realtor…if they can be found.
Having an accurate documented FMV would hopefully lead to a quicker sell to someone not needing a loan.
I get it that you are done with all the extra work involved but it might be that finding someone who understands the unique situation you are in and would be willing to manage the work needed to the benefit of you and mom would be the path forward.
With a mortgage existing, you also have requirements for insurance coverage…. homeowners, maybe flood, maybe windstorm. If you flat out do not have $ or interest to cover all costs, imho really 2 choices:
1. U or your hubs have POA that allows to sell house, you find a Realtor that understands the nuances of LTC Medicaid program, e.g. supposed to be sold at its FMV which is usually the value on last tax bill…. if this is way off, then ideally get it inspected and then appraised. Pls realize that if y’all do this, & also spend $ to get it “market ready”, to stay current on mortgage, current with insurance & taxes, it may be an future issue with LTC Medicaid if repaid costs from the act of sale.
Why? because as 100% in her name, proceeds from the Act of Sale is 100% hers. Should she give you $, it appears gifting you $ which is so NOT allowed by LTC Medicaid. Yeah you can file documents to deal with this but will more than likely bog down her going back on LTC because it won’t surface till she spends down all the house sale $ to private pay her NH so once again runs out of $ and then does afresh application to LTC Medicaid. She’s still alive, it’s not an after death recovery situation, which is what JoAnn is referring to. To me, imo, any $ you & hubs spend on house has to be such that you are ok on not being reimbursed. Ditto for daughter who paid mortgage in the past. Medicaid tends to take the position that what we do or spend for our elders, we do out of a sense of familial responsibility with no expectation of reimbursement. To be reimbursed - in my not an atty opinion- you need a preexisting Agreement b4 $ spent or roll it into an eventual after death settlement.
2. house defaults on mortgage & company does foreclosure. Find his mom’s mortgage agreement to see what system is for Notification of owners default. Usually mortgage co starts foreclosure process after 3 sequential months of no payment. But if you know for sure not paying anymore, do letter now so process starts sooner. Send registered letter stating his mom will no longer be paying mortgage and include keys. Before letter sent, get utilities shut off, forward mail to your address or open a postal box at a UPS or packing / shipping store in your name but with mom as a secondary person to get mail; clear house of whatever you want to keep, then lock and leave.
Mortgage co has the keys, it’s their monkey now. They will hire a firm to get it cleared, cleaned, placed for sale. When it sells, IF it sells for more than balance of mortgage, interest, fees, costs, that $ will be paid to your mom. It is reportable income to LTC Medicaid and will in all likelihood take her over 2K assets allowed by most States. So she will go off LTC and do a spend down by private pay to the NH.
There are imo 2 wild cards in the above scenarios and both are legal issues and have to be answered by an attorney in your State:
1. right now MIL building a talley of costs paid by LTC Medicaid for room&board costs in the NH. Some States have it that all the costs paid by State have to be reimburse either from Act of Sale (if y’all sell it) OR due from whatever $ possible to her if foreclosure happens. Other States do this after she dies and the file it as a claim on her Estate. This is atty answer.
2. Does hubs have full POA that allow for him to sell her home? If not, does daughter that used to live in the home have one? And is she willing to deal with all this? If a willing POA does not exist, somebody needs to spend their own $ to find atty let you know what options exist.
fwiw Realtors tend to push fresh paint, new landscaping & fixtures, yada yada. Finding one who understands why so not happening and the FMV Medicaid requirement may not be easy.
Pls. let us know what happens!
This would mean off Medicaid while she private pays until that income is gone.
Other option the home is taken over by the bank and sold and no one really gets anything.
The Medicaid folks will be there for clawback on this home in ANY case after her death.
There aren't any "good options" here, but there may be some better than others, and because there is a wide range of opinions here I would get LEGAL opinions on options for your state and your particular case from an hour of time from an elder law attorney. THIS will be money well spent, to be honest, and you will know the options are legal and best for your particular case.