Parents ill and upside down in a reverse mortgage

[naijhi]

What is the name of your state? FLA.
My parents have a reverse mortgage, 2 months ago they took most of the equity out (80k) in order to pay some bills for home health care services that were mounting.( 17k remains in the equity with the bank) we had started to need 24 hr care at home for my mom, who's also very ill , months prior it was only 8hrs. a day for 5 days a week...almost manageable with my help…. my father decided to take the reverse equity out to help pay…he said that by the time it runs out we’ll be ready for medicaid…Well, best laid plans…it didn’t happen that way… Last month my dad fell and came out of the hospital in bad shape, The situation changed drastically …all of a sudden his mind was no longer as sharp as before… My sister and I decided to move them (in the hopes of it being temporary) closer to her into an assisted living facility in another state...we promised they'd go home mid summer but we now see that it's impossible for them to return home without 24 hour assistance and they should stay where they are. They owe the bank 186k, sale prices are down horribly in Fla.and i think we could sell but only 120k-130k...meanwhile I'm paying the assoc. fees and expenses of the place till I figure out what to do... the question is ..do i (they) just walk away and let the bank foreclose, do i call the bank and let them know (we have 6 mo. after they're out of the house to notify the bank.Do I hire an attorney to deal with it? They have no other money except their SS and a VA benefit and I'm using the money from the rev mortgage to supplement the cost of the assisted living place we have them in....and I'll need that to give them a few years of dignity and the assistance they need.... I'm already paying for their meds (moms already maxed for part D this year) and supplemental AARP ins. and now the condo fees (4800- a year) for their Fla. place. I don't know what to do...it's all in their name...I don't care about their credit...just being able to provide for them for a few more years while they still have some of their mental facilities..but physically they're a wreck.. regarding the money they took of which 60k is left and in the bank for their use....I was told to gift each of us 12k each (4 of us) and we did, and then established an account for the money in my sisters and my name to filter into their accounts to pay the bills at the facility, which is what we're doing...Neither of us wants any money from them...we just want to keep them where they are and cared for....What would be the best route to go, I'm afraid to just hire a lawyer as i know it's costly and don't want to spend what little they have for the wrong reasons...If we walk away can they attach their SS or vet benefits? They are now incapable of handling their own affairs and I've been saddled with it all... any advice would be so very helpful..Thank you!What is the name of your state?

[acmb05]

Originally Posted by naijhi

What is the name of your state? FLA.
My parents have a reverse mortgage, 2 months ago they took most of the equity out (80k) in order to pay some bills for home health care services that were mounting.( 17k remains in the equity with the bank) we had started to need 24 hr care at home for my mom, who's also very ill , months prior it was only 8hrs. a day for 5 days a week...almost manageable with my help…. my father decided to take the reverse equity out to help pay…he said that by the time it runs out we’ll be ready for medicaid…Well, best laid plans…it didn’t happen that way… Last month my dad fell and came out of the hospital in bad shape, The situation changed drastically …all of a sudden his mind was no longer as sharp as before… My sister and I decided to move them (in the hopes of it being temporary) closer to her into an assisted living facility in another state...we promised they'd go home mid summer but we now see that it's impossible for them to return home without 24 hour assistance and they should stay where they are. They owe the bank 186k, sale prices are down horribly in Fla.and i think we could sell but only 120k-130k...meanwhile I'm paying the assoc. fees and expenses of the place till I figure out what to do... the question is ..do i (they) just walk away and let the bank foreclose, do i call the bank and let them know (we have 6 mo. after they're out of the house to notify the bank.Do I hire an attorney to deal with it? They have no other money except their SS and a VA benefit and I'm using the money from the rev mortgage to supplement the cost of the assisted living place we have them in....and I'll need that to give them a few years of dignity and the assistance they need.... I'm already paying for their meds (moms already maxed for part D this year) and supplemental AARP ins. and now the condo fees (4800- a year) for their Fla. place. I don't know what to do...it's all in their name...I don't care about their credit...just being able to provide for them for a few more years while they still have some of their mental facilities..but physically they're a wreck.. regarding the money they took of which 60k is left and in the bank for their use....I was told to gift each of us 12k each (4 of us) and we did, and then established an account for the money in my sisters and my name to filter into their accounts to pay the bills at the facility, which is what we're doing...Neither of us wants any money from them...we just want to keep them where they are and cared for....What would be the best route to go, I'm afraid to just hire a lawyer as i know it's costly and don't want to spend what little they have for the wrong reasons...If we walk away can they attach their SS or vet benefits? They are now incapable of handling their own affairs and I've been saddled with it all... any advice would be so very helpful..Thank you!What is the name of your state?

If they are no longer going to be living in the home then the balance on the reverse mortgage would be due. You will have to sell the home in order to pay back the reverse mortgage.

The reverse mortgage does not affect their SS or disibility since it is not considered income. You really need to try and sell this place. Even if you have to sell at a discount for what is owed on it.

[las365]

regarding the money they took of which 60k is left and in the bank for their use....I was told to gift each of us 12k each (4 of us) and we did, and then established an account for the money in my sisters and my name to filter into their accounts to pay the bills at the facility, which is what we're doing...Neither of us wants any money from them...we just want to keep them where they are and cared for....What would be the best route to go, I'm afraid to just hire a lawyer as i know it's costly and don't want to spend what little they have for the wrong reasons

Who told you to do that? I am no authority in this area, but it sounds to me as if you may have opened your parents, yourself and your siblings up to a lawsuit from the mortgageholder for some sort of conversion or attempting to defraud them out of repayment.

I don't understand why you would resist getting legal advice from a lawyer about the legal way to handle these problems and transactions. It is generally a lot easier and cheaper to avoid doing the wrong thing than to defend a lawsuit.

[naijhi]

thank you for your replies. I'm not at all resistant to hiring an attorney...this all just happened and I'm just getting above water with all their affairs. I've found a real estate agent to try and sell their place but I know the value has gone down to less than what they owe and they say it could take years to sell...meanwhile I'm saddled with the assoc fees and maintenance. my questions are...What happens if it sells for less, if i don't pay the assoc. fees I know it goes into foreclosure, i can maintain them for awhile ...but not years. i read yesterday that with a reverse mortgage you can never owe more than you sell for..but they're upside down because of prop values, so that may not apply...do I contact the bank ,retain a lawyer now or wait and see what we're offered with sale? If they, the bank... takes the sale are my folks responsible for the balance due and if they can't pay it ,then what? or do we just let it foreclose now and get a foreclosure attorney...as I said I'll hire an attorney when i know a bit more of what i'm dealing with...at this point I'm just scared I'll do the wrong thing.

[FlyingRon]

Further, the transfer seriously jeopardizes their medicare eligibiltiy. You definitely need lawyer familiar with elder care issues to unravel the mortgage, medicare, and tax issues of all the nonsense that has been going on here.

[Ozark_Sophist]

Parents are not going to be eligible for Medicaid until the gift money is accounted for. Transferring the money as you have described (to other name, but still parents) is illegal fraud. You need to have a local attorney sort this out.

[naijhi]

we have put the place up for sale and will continue paying all assoc fees and taxes etc., we plan to contact the bank in a few months and let them know we have moved my parents out of the house and they will not be returning. The money that was transferred to the new account is being filtered as needed to their account to pay for the costs of the assisted living facility they are presently in. We are keeping accurate records which will in the end show that every penny spent was spent by them and for their care.If we are able to make a sale on the home, and the bank will take a short sale...we will try and work out something with the bank to repay the balance due with the monies that remain through an attorney.

[FlyingRon]

Keeping accurate records doesn't diminish the fraud you are perpetrating.

[naijhi]

After all that I've read here and speaking with someone in the legal field we have decided to put my parents name on the account that the money is in. We have 6 months after they are out of the house to notify the bank and then about a year and a half to try and sell it. We will do all that and maintain their assoc. fees, taxes , and insurances etc. We did what we had to do to deal with the situation presented to us and get them safely taken care of. Our records of all transactions are meticulous and every penny will be accounted for and we'll try to do whatever is right. We do not want to commit any crime and from what I'm told, if we do all this we will be ok. In the end if we owe the bank I will probably spend the rest of my life paying it off but will do whats needed to protect them...thats about all I can do in making this situation right.