My Mother has always kept me at arms length, I'm the only child. This year she was hospitalized twice for pneumonia, had a long stint in rehab. I found her house deplorable, took family leave to clean it all up and in digging around to find what bills needed paying I discovered what financial disaster she was in. Because she was confused in the rehab I was able to get POA so I could pay bills, She took out a reverse mortgage over ten years ago and has exhausted all of that, ( over $260,000) with nothing I can see to show for it. She has maxed a credit card for $6000. and I cant find anything to show for that one either. I plan to create an online account for that one just to see where it was spent. I Took family leave for five weeks to get her house straight so she could go back there after rehab. She didn't want to sell the house and in investigating any type of supportive housing in our area, there is a two year waiting list! I live 25 miles away and work full time. There are no other family or friends to support her. I applied for Medicaid for her since her monthly income is under $1000., still waiting. She had rehab at home for a few weeks and I also hired a private person to come in to do cleaning and shopping once a week. Last week I found a letter among her newly arrived mail regarding her back property taxes. She has not paid her taxes in three years and now owes the town over $17K dollars. I called the tax office and was told she signed an agreement with them last year to pay $500 a month to catch up and she violated the agreement! This woman is in total denial and wont agree to anything yet, just keeps telling me to 'wait and see". I'm angry that she has created this mess and I'm left to try to straighten this out. There is no way to pay these taxes back and pay her living expenses. I feel we should sell the house now while its summer (better market) instead of waiting for the town to foreclose. I guess I will have to get her an apartment somewhere but she really needs some kind of supportive housing with someone looking in on her. There are waiting lists everywhere. Mom just turned 87. I guess we just get an apartment and pay for it out of whatever is left from the sale of the house till its gone and then what? Selling the house will make her ineligible for Medicaid if there is money remaining. I'm so frustrated.
When my Mom [98] passed, it was much easier for Dad [94] to allow into the house caregivers, and for him to eventually say he wanted to move as the house was too much for him to deal with. He's really happy in Memory Care. I also had to take over the finances for my Dad as he was throwing out bills thinking they were junk mail... it was my Mom who handled the checkbook and the bill paying.
When it came time to sell my Dad's house, I hired a licensed Appraiser and he knew the house was going to be sold "as is", thus a Buyer could not ask Dad to fix anything. The house sold very close to the appraised value, and the Buyer is busy remodeling.
I would also have to commit ( as POA) to paying another 1200. quarterly for the CURRENT taxes, which she simply does not have. Since my first post, I fell and broke my tibia which requires I be on crutches now for 6-8 weeks. I had to call Mom, (cant drive yet) to inquire if she had necessities, etc, anything she needed. When I broached the subject of the house and to think about where she wants to relocate she screamed that I'm trying to "scare her" and handed the phone off to the housekeeper. Right now I'm out of work and cant drive so I'm making use of the time this way: putting her on every waiting list I can find. She will need to be out of the house before a realtor can show it so it may no t be until spring. If the town forecloses before then, then they can place her somewhere, I just don't care anymore. I'm tired of being mired in all this red tape sh** for someone who wont cooperate at all. I don't imagine theyre allowed to dump an 87 year old out on the curb. I will try to find her a safe living situation with some type of supervision. They all require a deposit, if I have to use my own funds for the initial move then I'm placing a letter with an attorney that I recoup those funds when the house is sold. Period. Lost enough sleep over this situation for someone who only abuses me and takes no responsibility for the mess she has create3d. Dementia is definitely getting worse and she would be safer with supervision, tho porbably not happy, but then again she wont be happy anywhere. Thanks all for your support and feedback. Well appreciated!
Your mother may have a different understanding of the reverse mortgage than you. She may not realize her obligation for taxes.
I found this:
A reverse mortgage or home equity conversion mortgage (HECM) is a type of home loan for older homeowners (62 years or older) that requires no monthly mortgage payments. Borrowers are still responsible for property taxes and homeowner's insurance.
Realtor did a book for you?if so, Look at the comps and drive around to see the actual comps sold & also look at a couple of similars currently on market. Are they like moms? The ones currently on market are they empty & staged for buyers? Freshly painted interiors and yard looking all green, trimmed & happy?
Just how do they compare to moms? Be critical & realistic.
Trying to sell old folks homes with elderly still living in them, with old people's furnishing, kicknacks & "odor" isn't easy. Mom & her pets will need to leave whenever there's a showing ideally. Is this at all feasible? and feasible for a month or two...?
As one who has dealt with parents pre WW2era unrenovated home, there could be stuff lurking that makes it very difficult to ever sell at comps value. If there are foundation problems an inspector will find & include it in their report which will go to the underwriter for the mortgage company for the buyer. FHA & VA usually will not do any underwriting on houses with foundations significant issues and they are about 80/90% of buyers. Once an inspection is done, all the deficiencies found by an inspection have to be disclosed from that point forward. If significant it's going to be cash sale likely to a investor (6 week flip type) who will pay land value plus 20-30%. So 100k house maybe pay 40-50k.
Before you get too much deeper on house time, energy & costs, think if there could be major deficiencies that will come up in an inspection. You could even proactively get an inspection & appraisal done but that may just be throwing $ away. If the RM lender did not even do an inspection prior to the lending, there could be issues. If so, it may not even sell for enough to clear the RM payoff. If that's what is looking likely, cut the losses & walk.
Imho Mom has 3 intertwined categories to deal with -financial, medical & legal. And the linchpin on all 3 is the realistic value on moms house, my comments are based on that:
Financial & legal - The house with at least a 260k RM on it.....if it was to sell "as is", could it really truly sell for over 300k-320k??? Within a 30/60 day on market? You need to find the RM to see what the payoff amount is, it could well be over 300k with fees and extras. Mom may be already in default (with fines) on the RM as payment of taxes is required compliance for RM and the RM can call in the loan. Look for paperwork on this at her house & a search on anything attached to the property at the courthouse (should be able to do online, find the tax bill as the parcel # or PPIN is the key for the file). If the house cannot sell for more than 300-315k, probably best off letting it fall to tax sale (it's probably not a foreclosure but a tax sale; takes longer to finalize redemption dependent on state laws) & mom walking on anything having to do with the property. Let co. Tax assessor & RM work it out....Mom stays there till evicted.
Now if it could easily sell over 315k, thats different. So what is it realistically?
Medical & financial - if she's still good on her ADLs -which it's sounds like she is - she won't qualify to be "at need" medically for NH Medicaid. If things should change and she can show (via health history, a hospitalization & doctors orders) "need" for skilled nursing care, she could apply for NH medicaid which will cover all costs of her stay. At 87 with no major health issues, she could have another decade..... Instead she can likely qualify (if her income is only 2k) for a Section 8 type of senior housing with a community based Medicaid program for some hours weekly by state paid caregivers or health aides. Put her on every waiting list you can. If she's on a waiting list and gets eviction notice, it could move her to the top of the list.
The Area on aging should have lists of all senior housing both governmental supported but also the non-profit NGOs. In my city, Catholic Charities has a whole network of senior housing - from high rise apts to congregate housing. Get mom on all lists & fill out the paperwork.
To keep your sanity & own credit in all this, I'd suggest you ASAP rent a mailbox in moms city that becomes moms new address. UPS stores rent boxes but what might be better is a package / shipping store privately owned that rents boxes....so they call you when something interesting comes in. These tend to be nearby colleges & univeristies. Send change of address cards notices to all moms accounts. (including her bank account - for banking, do they have a copy of the dpoa?are you a signature on it & can go online? If not, get this done) By having a p.o. Box it will be a sanity saver as when you come in once a week or once a month, you stop by & get everything "mom" to deal with. I'd be concerned that your own credit is getting commingled with moms & the box provides some distancing. If mom is a property owner, she likely has at least a dz. ++ accounts that send mail to her (utilities, tax authority, insurers, RM affiliates, medicaid & housing applications, etc). Really find every account and send them the change of address post cards (USPO has these for free but you have to ask for them).
Out of curiosity, what roughly is the amount of $ you have spent on moms house & care costs? Are you hoping or needing to get this $ back from house sale?
About AL, funding on AL are via a medicaid waiver. It's a diversion of medicaid funding. Each state administers its Medicaid uniquely within federal guidelines but each state decides what if any waivers will happen. Most states do not pay for any AL at all. AL waivers since they are NOT dedicated medicaid funding (like NH is) can change or stop so if your state even does AL waivers the # of beds is going to be quite limited & restrictive; the 2year private pay is pretty standard for an possible future AL bed. As an aside on this, the trend for waivers is to back off any AL waivers and instead fund PACE type of community center based daily programs that do health services, meals & social /activities. The one by us (the Benson center) is run by a division of Cathlic charities and brings elders in by van from their home, thier kids home, a section 8 or a catholic charity run apt, to the Benson PACE 2-4 days a week. It's viewed as a more cost effective use of $ than paying 1-on-1 at an AL plus keep elders "at home". If moms city has PACE, she will likely need to participate in it before other medicaid programs can be used.
You can try to be proactive about the debts, contacting the credit card issuer and asking to negotiate a compromise.
There are agencies that help in this process. During the real estate crisis, I know that lists were sent to homeowners advising of this resource. They might be able to help negotiate some compromises with the creditors.
Addressing only other specific issues:
1. Reverse mortgage: this will never be paid off, and probably can't be increased to provide more liquid funds. And at this point, I wouldn't even worry about paying it down. RM lenders are from what I've read bottom feeders and exploit seniors.
2. Taxes are a different situation.
a. From what I've seen in my neighborhood, and from what the county treasurer's office has told me, the county will foreclose on delinquent taxes after the state statutory period has run. You need to find out what that is.
Since the county doesn't want the house, it conveys it to the city in which the house is located. The city doesn't want it either, especially if it's abandoned. So only nominal attention is given to it. It's not an asset and the city doesn't want to care for it.
I'm seeing this firsthand with the dump next door, abandoned by the family after the family junkie/alcoholic derelict died. Six years later, only the lawn has been kept up b/c the neighbors complain to the city. It was an eyesore.
However, a flilpper has just purchased the house and has in a few weeks made extensive progressive in preparing it for sale or rental. I have a new respect for commercial flippers (not the DIY couples who get a lot of free tv air time, but the dedicated, experienced pros).
b. I raise that issue b/c contacting a flipper might be a way to deal with the house. You might even be able to arrange a sale/leaseback arrangement, although the rent might be more than she can afford. You don't mention what income she has, either SS or some retirement fund, so that would be an issue as well unless the flipper can qualify the house for low-income rent.
c. You might also try to renegotiate the payment arrangement for delinquent taxes, depending on what your mother could pay. That might hold in abeyance any tax foreclosure, and keep the property off the county or city foreclosure list until you can make some other arrangements.
3. I reiterate Babalou's question on value of the house. If it's declined and the RM plus back taxes would cancel out any equity to pay for your mother's expenses, then that's not an option to pay for her care. Sorry to be blunt, but that's unfortunately a real possibility.
4. I wouldn't raise the issue of your having obtained proxy authority under a POA b/c she was confused while in rehab. That immediately raises an issue of whether or not she was sufficiently mentally cognizant to have executed the POA, especially since you state you obtained authority b/c your mother was confused. I wouldn't recommend being dishonest, but please do keep that knowledge to yourself.
5. You state your mother is in denial. Probably true, but with everything going on, she's probably also overwhelmed and is incapable of thinking rationally to develop plans for her situation. The "wait and see" attitude to me is her method of putting off decisions and issues that she's incapable of addressing. That can happen to caregivers too.
Instead, work out an option and just mention it to her; don't ask her to opine on it or approve it. It's too much for her to handle.
6. Using any proceeds from sale of the house for an apartment is sensible; however, I would wait until there's more input from Medicaid experienced people here. There might be a way that this can be managed legally to reserve those funds, but this is way beyond my experience. It is, however, an issue I would consider discussing with an elder law attorney with significant Medicaid qualification experience.
7. In the meantime, reach out to any and all elder agencies in your city, county and state. Area Agencies on Aging are good starting points. Michigan has an Elder Law of Michigan agency which is very helpful. You might be able to locate other resources to help out.
Good luck, and don't forget to take as much downtime for yourself as you can.
It doesn't mean you walk away. It means that the financial burden is not yours, which legally it should not be.
Curious, is the house worth substantially more than the tax lien and reverse mortgage combined? Would it pay for a couple of years of assisted living?