Reverse Mortgage/Medicaid situation

Need more details on the house. How much is it worth, how much does she how, how many years left, what interest rate.

Whittaker said:   vishalj77 said:   1. Getting a reverse mortgage
UGH.

I'm not saying don't do it, but many of these are really bad. Supposedly AARP has some tips on their website about what to avoid in regards to reverse mortgages.

2. Moving in with one of her daughters who will take care of her

3. Renting the house for $700 to her son
I'm not familiar with all states, but in many states, the only thing keeping Medicaid from taking her house under the law now is that it's her "home", she's living there. If she moves out, it's no longer her "home". In some states you can lose this status because of a stint in a nursing home, if your away from your "home" for a period of time.

She can still move in with her daughter and have her son live there, as long as she technically maintains it as her residence (mail, utilities, taxes, etc.), and nobody in the family should ever acknowledge that she's "living with" her daughter.


Wouldn't it be better if she just sold the house? Medicaid can't take over property once it is transferred to someone else.. correct?
Trouble with that is Medicaid will want to know what happened to the proceeds, and if it is within the look-back period for that state, they likely can claw it back.

You really should have been on this before any applicable look-back period.

"legalize" the money. Buy lots of 500$ VISA and AMEX cards at the local grocery store.. then pay cc bill with sale proceeds. Done.

If she is moving and the government will take the house, why not stop paying the mortgage? Let the house go into foreclosure. She can't afford to pay the mortgage and why do so if she is just building equity for Uncle Sam?

vishalj77 said:   1. Getting a reverse mortgage - someone told her that she would get paid $200/month and that it makes sense, since the house is going to be taken away by medicaid when she dies anyway..
??? If Medicaid will take the house (i.e., has a lien on it for the full value), what company would give her a reverse mortgage? Those shady operators assume they have will have clear title upon the death of the homeowner, but if the gov't has a prior claim, they'll never give her the reverse mortgage.

xoneinax said:   vishalj77 said:   She also received a letter from Medicaid that they would claim the house in the event of her deathIs this part of how they will be gutting Medicare to pay for ACA ?

No, pretty sure Medicaid has always had the rights to place a lien on the estate for the value of care provided.

UncaMikey said:   vishalj77 said:   1. Getting a reverse mortgage - someone told her that she would get paid $200/month and that it makes sense, since the house is going to be taken away by medicaid when she dies anyway..
??? If Medicaid will take the house (i.e., has a lien on it for the full value), what company would give her a reverse mortgage? Those shady operators assume they have will have clear title upon the death of the homeowner, but if the gov't has a prior claim, they'll never give her the reverse mortgage.
Medicaid probably hasn't placed a lien on the house as of yet, so if they hurry they may indeed be able to get the reverse mortgage

That would actually not be a bad situation as it turns the $650 mortgage expense into a $200 payment to the senior for the rest of her life , till she can't live there anymore

SUCKISSTAPLES said:   Medicaid probably hasn't placed a lien on the house as of yet, so if they hurry they may indeed be able to get the reverse mortgage
Yea, maybe, but if that's the case the OP needs to budget for legal expenses when the r-mortgage company realizes they've paid out money and don't get the house.

It's hard for me to believe that the r-mortgage people wouldn't know about these things and would not do their own due diligence.

SUCKISSTAPLES said:   The lien is secondary to an existing mortgage

the mortgage is recorded first....which is why if op hurries they may still be able to get it before the Medicaid lien is placed
Worth a shot. OP will discover very quickly whether the look-back law in that state covers the proceeds from a reverse mortgage.

xoneinax said:   Whittaker said:   OP will discover very quickly whether the look-back law in that state covers the proceeds from a reverse mortgageLook back or not, you cannot squeeze blood from a turnip
I meant the lender might not want to underwrite it if the look-back law is encompassing (unless the lender is unscrupulous, which returns to my initial point of checking with consumer advocacy in regards to the matter).

SUCKISSTAPLES said:   The Medicaid lien is not going to be enforced for 30+ years till this senior dies. There is no lookback issue .
Actually, we don’t know when she will die, we don’t know if or when she will move out, or what the look-back provisions are in that state, which is why I posted that the OP should find out rather quickly if a reverse mortgage is applied for.

Just bc Medicaid places a lien doesn't mean they'll get full, or any , payment
Of course, but a lot of the states have really beefed-up their look-back laws, and put some real teeth in them, allowing them to seek redress and claw back assets or monies from the adult children and/or other heirs.

Whittaker said:   SUCKISSTAPLES said:   The Medicaid lien is not going to be enforced for 30+ years till this senior dies. There is no lookback issue .
Actually, we don’t know when she will die, we don’t know if or when she will move out, or what the look-back provisions are in that state, which is why I posted that the OP should find out rather quickly if a reverse mortgage is applied for.

Just bc Medicaid places a lien doesn't mean they'll get full, or any , payment
Of course, but a lot of the states have really beefed-up their look-back laws, and put some real teeth in them, allowing them to seek redress and claw back assets or monies from the adult children and/or other heirs.
It sounds like mom doesn't have any assets, just a house with a mortgage (that the state intends to place a lien on). Heirs aren't getting much in this situation

If she moves out of the home , Medicaid may have a stronger claim to it. I seem to recall the Mmmna or something like that determined what a spouse can keep when the other spouse needed care

Better the relative moved in with her , than if she left the property