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Medicaid will put a lean against her home, but if she can no longer live in it and she has few other assets, it may be time to go through the Medicaid qualification process (your county adult services should do this).

Carol
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RM are sticky to deal with to begin with & there are issues that come up for a property owner who gets a RM and then needs to go into a NH looks to Medicaid to pay for NH, like....
- if monthly income from RM puts them above approx 2K Medicaid "income" test
This is what CatTails was referring to.
- how does having a RM affect the standing for Medicaid's MERP program claim or lien on the property after death- this is going to be different for each state's law
- the RM contract becoming out of compliance once they go into a NH.Under FHA backed RM, if the owner moves from the house, the reverse mortgage is out of compliance. Please go over the agreement to see what your mom's policy reads and what her options are. If RM holder calls in the loan, it could be expensive.

When you do a FHA backed RM there are 4 main problems:

FAILURE TO PAY - property taxes, homeowners/flood/wind insurance
- with a RM the property owner still has to pay for all theses items. If they go into a NH, all of their income less whatever is their states personal needs allowance of $ 30 - 70 a month, must go to the NH. They won't have any $ to pay the insurance, so who will pay for all taxes, insurance etc? Can they afford this for years & years?
MOVING TO A NEW RESIDENCE- if reverse mortgage property stops being the primary & homesteaded residence, you are required to pay your loan
. The RM contact is void. If the NH is viewed as a new residence, your RM loan is due.
BEING OUT OF THE HOME FOR MORE THAN 1 Yr - the loan will come due.

ALLOWING THE PROPERTY TO DETERIORATE - being away for a while is allowed but if the property gets run down while you are away, the loan could be called in. Or if there is damage to the property, it must be repaired - like if there is roof damage due to a hail storm. Who is going to pay for this? The RM loan holder can do compliance checks on properties.

After Hurricane Katrina, some homeowners who had RM's, got letters w/detailed questionnaire on the home, how it was being secured, status of repairs, requiring a copy of a certificate of occupancy, insurance claim filed and status, utility information - this was all about calling in loans that looked like they were in areas with uncertainty. And that was in 2005 before the real estate market tanked.

Two of the big reverse mortgage players, Bank of America & Wells Fargo, got out of the new reverse business in 2011. They were like 50% of the market too - they still service & honor the old loans but do not write any new ones. They did it because alot of the homes with RM now are negative-equity so they were taking losses on RM's done in the go-go real estate years of the 1990's - 2005. For new RM's the loan to equity % is a lot lower now than in was a decade ago too.

My mom looked into a RM years ago, her home would never qualify as it has foundation issues and cannot qualify for FHA home loans because of that and plus it is in a historic district (where repairs means historically accurate) made RM just not feasible for an underwriter to bother with. Not all homes can qualify for RM. I think RM work best for young healthy retirees who feasibly could plan on being in the home for decade++. Good Luck.
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Can a person get a RM if he AND his children own the house as per a will?
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Geo11- wills matter only to whatever the situation is after they die and then what the assets of and debts against the estate are.

RM are secured debt. RM debts must be repaid. Upon death or other defaults (like I described in my post 5 years!!! earlier) the RM debt comes due. Family can pay off the RM to inherit the house. But the way RMs are structured will more than likely mean that the mortgage, plus interest, plus fees and anything else RM can add on will make it a huge sum of $$$. If its a federally backed RM, Family can let RM know in writing they intend to buy and they have 4 mos (I think, could be 3 mos) to arrange for payment or financing to pay off the RM at 90% of balance. Otherwise house fully reverts to mortgage co. and they usually turn it over to a broker to sell it.
Heirs have no say as they did not own it & dud not inherit property.

Read the fine print on the RM carefully.
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Can a lien from doctors and/or Hospitals be put on your home when you have a reverse mortgage?
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I don't think that your mother technically owns the house anymore -- the bank does. (But don't take my word for it! I don't really understand RM.)

But people who have no house, or who have such high mortgages they have little or no equity can qualify for medicaid. I don't see why a reverse mortgage would stop anything. Go for it!
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Call Medicaid for exact details. None of us will probably know for sure and perhaps it depends on the state you are in.
Did the reverse mortgage work out well for your mom? I am thinking of doing it myself.
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My understanding of a RM is that the company takes ownership and, in this case, your mom would be receiving month payments. The payments, income, she receives would be viewed as income along with her SS. You can call Medicaid and get their take on it. If you get "exact details" from then, I will be surprised. I would suggest you just apply. You initial application should get you a response with additional questions that have to be answered. Good luck, Cattails
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