What to do when both elderly on Medicaid with a mortgage and need to go into a nursing home?

Regarding the age of the elderly being approved for a 20-year loan, I live in California and was told once many, many years ago that it simply doesn't matter how old a couple is when they apply for a long-term mortgage loan; it only matters that they are eligible on "paper" at the time of loan processing. I believe the banks/lenders know that if the elderly pass away prior to the loan being paid off, the children of the deceased can take over the loan and if that isn't possible then the bank/lender would just take back the property and re-sell it. Just think, in the meantime while the borrowers are still alive and paying the mortgage, how much interest the banker/lender has already received. In my opinion, especially in California where the real estate is high-end and prime, it's a win-win situation for the lenders.

I assume the care facility will be expensive. Do not sell the home to pay for it. There is no reason to give away your parents hard earned equity in their home. We rented my mother's home and paid for luxury senior care and had a surplus to put in her bank account.

You all have been very helpful. I will pass on this information as the grandson is my nephew. To answer the question about how they were given a Mortgage, they were Home Builders as a business. So they often built homes and then resold them, sometimes living in one of them for a few years. When the husband started getting Alzheimer's others were not aware it came on as fast as it did and he made some bad money investments and lost most of everything. They are currently on Medicaid not Medicare. I know this will be a game changer to some of what you all have answered.

You don't give many details about your situation so I don't know if my opinion will help at all. My dad was 3 months behind on his mortgage. His house was in foreclosure. Luckily he was able to get his mortgage modified. However, the mortgage company extended the mortgage to 30 years. Plus his house is underwater. So when he is no longer living in the house I will mail the keys back to the mortgage company - "Deed in lieu of foreclosure".

Dogabone, I think some of your information is incorrect. Nursing homes don't take the assets directly, they simply require payment to be made. Exact regulations on what is and is not exempt from Medicaid spend-down or estate recovery vary tremendously from state to state. Rental income is typically countable income, BTW. Burial policies are typically exempt, other policies with cash or face value are typically not.

An estate planner and/or Medicaid-competent elder law attorney would be the best bet for this family to find out what their best options really are. Grammy, assisted living and skilled nursing are two very different things, particularly from a Medicaid point of view. You need some assessment of their level of care needs to help determine what will be possible, and how they can stay together presuming that is desired. Some facilities will do this for you before anyone commits to a move there, or there may be a geriatric evaluation with social service help available in your community. Area Agency on Aging or something with a hospital with a comprehensive program would be possible resources.

Mudiver:this is part of the answer paying the house payments while in a nursing home is usually done by deducting it from the parents retirement and paid though social services or POA. My Dad is in a nursing home and his prior commitments to pay are sent to POA and then the POA makes the payment. Normally the nursing home would get that money, but the payment was established before he new he would be going there. Once he passes that another story.
In reply to this above,
Sure as long as theres Millions of dollars of assets to play with.But,the money that is being used to pay the house payments could be going to healthcare.If your elderly would ever apply or need Medicaid?The POA will be asked with wonders why all those house payments was made while they was in the nurcing home.Not only the nurcing home will be asking why?So will Medicaid.The POA maybe required to pay all of that back in the end.Same example,why pay the house Phone bill or house Cable bill if their in a nurcing home?Why pay the electric bill or gas bill when by rights the home should be winterized .

In this type of situation as your discribing above,will result in the elderly losing their every asset they ever obtained in life as for say "The American Dream" as an example.What ever happened to the option of living at home till one dies idea thought that many think or feel...That thought or idea is part of the American dream as owning a home.Because,of today's era that option is not able to be obtained as it was back in the 1980's era.That's all another story I rather not get into today.
To help answer your questions with the best truth with advice I will say this,
You explained above that the grandson in the only family member willing to to help.
Because,the American Dream is gone.The grandson will be force by the nurcing home to sell their home,car,life policies as we call assets.Every asset must be sold.In order for this to happen requires "Guardenship".Also,requires to spend thier funds down to nothing.If the grandson don't spend the money down?The nurcing home will.Tell the grandson to start repairing the home for resale using their assets to do so.If the elderly's are Millionairs?They have no worries.If not?They will be forced to spend their assets in order to apply for Medicaid.In other words,I hope the family had a Will/Trust created 5 yrs ago.With that 5 yrs expired I see no issues saving their assets to go to the family .Medicaid goes back 5 yrs so don't try to gift any money to a family member or friend.The nurcing home and Medicaid will drain their assets to a prun.They don't just go after the home,accounts.They also,go after the items in the home.Requires a assement of their belongings in the home.A forced auction is required to sell everything they ever owned in life.Sad it is to see their life savings to be sold.Also,sad to see how much nurcing home take and still able to sleep at nite lol.
A assisted living facility is the best idea because,their not with Medicaid but will require full pay out of pocket cost.If they was a Vet.VA pays $1,100 for assisted living.VA only pays $80 for nurcing homes.Remember,Medcare only pays up to 80 days.After 21 days it goes 80/20.After 80 is full pay.Rare to see a nurcing home let a elderly max out their 80 days.Avoid nurcing homes to avoid Medicaid.
One more thing,
If you rent the house out the nurcing home can't touch it.Because,that is income as the house is making money .Avoid becoming a POA and Avoid nurcing homes at all cost unless you want to see the elderly drained fast.Good luck.

The Equal Credit Opportunity Act (ECOA) prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, (age), or whether you get public assistance. Now how anyone know the law if they don't read it. You could have looked it up as easily as I.

I hope this isn't insensitive, I mean it in all sincerity...how did someone of their age get a 20 year mortgage? I would think that the bank would look at the age of the person to determine their ability to pay for the period of the loan...

this is part of the answer paying the house payments while in a nursing home is usually done by deducting it from the parents retirement and paid though social services or POA. My Dad is in a nursing home and his prior commitments to pay are sent to POA and then the POA makes the payment. Normally the nursing home would get that money, but the payment was established before he new he would be going there. Once he passes that another story

http://www.ssa.gov/OP_Home/ssact/title19/1917.htm

Sec. 1917. [42 U.S.C. 1396p] (a)(1)

B) in the case of a lien on an individual’s home under subsection (a)(1)(B), when—
(i) no sibling of the individual (who was residing in the individual’s home for a period of at least one year immediately before the date of the individual’s admission to the medical institution), and
(ii) no son or daughter of the individual (who was residing in the individual’s home for a period of at least two years immediately before the date of the individual’s admission to the medical institution, and who establishes to the satisfaction of the State that he or she provided care to such individual which permitted such individual to reside at home rather than in an institution),
is lawfully residing in such home who has lawfully resided in such home on a continuous basis since the date of the individual’s admission to the medical institution.

§ 32.1-327. Claim against indigent's estate for payments made.

Initially Medicaid exempts your house if it is your primary residence. If she did not change her address to yours then she would qualify for Medicaid quickly. Someone needs POA right now to continue to transact business for them. Grandson should also talk with an Elder Law Attorney to start the process.

If no one is going to be living there, then grandson should arrange to put the house on market after the grandparents go in the nursing home. I doubt there will be any profit, but it will eliminate the mortgage and maintenance payments. If the house is not sold, the family would be responsible for the mortgage and maintenance out of their own pocket. At the end, Medicaid recovery would step in. Money that family put in is considered, but if the house does not realize a profit beyond paying the mortgage off, the family could also not recover money put in. If no one in the family wants the house and is unwilling to buy it, I would put it on the market right away.

I have this issue too. The house is in bad shape, not super terrible, but bad. Mom 88, living with us for now. Don't think if it was sold that it would bring a lot more than what is owed on it. Older brother living there now, and my mom wants the house for my brothers (so they will have a roof over their head). We are a 9 hour drive away. But I figure, since there is no money for AL or NH in possible near future, that Medicaid will end up taking it, or forcing the issue of selling it anyway. So, any help anyone can be on this subject would be great.

I am totally amazed that folks of their age were able to get a twenty year mortgage, but I don't see any way to avoid selling the house. I would doubt that they would realize any financial gain with only seven years paid on the mortgage.

Grammy, maybe I am not understanding, sell the house to pay for their care. Or maybe you live in the house?