Can we turn this into a deal?

Question

Back Story:

Grandma has Alzheimer's. Her granddaughter took her in. They haven't gotten guardianship but are working on it. (cost is $400)

The home had new windows, roof, and gutters installed around 10 years ago.

Granddaughter is on title with grandma but not on the mortgage.

Mortgage payment is $388 (including taxes/insurance)

Balance is $40,500.

The home is worth about that much.

With a grand or two it could be made rent ready.

Issues:

They may lose elder care assistance if they rent it out. (Counts as income)

Mortgage is for what the home is worth. 12 years old note through Chase Financial. (they have a call in regarding this)

So what are the options? They are open to just about anything. They're either letting it go back to the bank or losing their other home because they can't pay both mortgages.

After guardianship is acquired I'm thinking either shortsale or lease option.

@Brian Gibbons any thoughts?

Bill Gulley · Answer

Ryan Dossey

Big bank or little, doesn't matter;

1. Grand daughter is not on mortgage

2. Bank's lien is not effected by tenants in common

3. The transfer is being accomplished for estate planning purposes for Granny which is an excluded transfer under the lender's right to accelerate the mortgage......due on sale doesn't apply in estate planning matters.

Ryan, you need to see an attorney for a letter. Most likely the medical facility attorney can accomplish this.

A letter to the big bank making these points;

The co-owner and borrower (loan number xxxxx-xxx-xxxx), suffers a permanent mental incapacity and is now admitted for institutional medical treatment, unable to manage her personal affairs her estate

The owners and borrower are engaging in a planned property transfer for estate planning purposes. Ryan D., a licensed Realtor, has been elected by the heir to assist in the management of the property secured and is elected as an estate conservator.

The secured debt created is acknowledged and payments shall be made as agreed by the elected conservator for the estate. The property is not listed for sale.

If the attorney needs to add other points, all good. You might mention Granny's age or that she is not expected to recover. They don't need personal medical information but the reason should be explained simply. Applicable law should be referenced as well.

You can start making payments, I'd suggest you just open a bank account, "Ryan D. (address of property), Estate". Would be the name and designation on the account. Make payments from that account.

The facility attorney can advise you as to property disposed of after the determination of assets and within the "claw-back" period.

Once you have a DPOA enforce you can make the sale of Granny's interest to you under your TIC Agreement. The DPOA expires with Granny. Forget about digging through boxes for a copy of the mortgage.

You can use the TIC, TAC, TOE method to acquire the one half undivided interest from the grand daughter.

See the facility attorney! Good luck :)

Bill Gulley · Answer

This sounds like a good fractional interest transaction. Buy the grand daughter's 1/2 interest, you're not in the family and title will likely revert to tenants in common. You have an undivided interest and possession, you can rent it, only half the income can be counted toward granny's income, until they get a DPOA when they could 1. reduce her income paying management expenses or 2. sell her 1/2 interest.

Grand

Daughter can sell her half with seller financing which will not be an asset for granny.

Further, granny's home is excluded from asset evaluations to qualify for benefits, as a rental she may lose that exemption, but the property value of half an interest will appraise lower than one half the market value due to marketability of a half interest.

You can also finance or refinance after you are on title with granny, you can buy her interest under refinancing guidelines but close as a purchase which is a bid deal when you don't have to come up with a down payment. You might payoff both with one loan! Check with your lender as to non-owner occupied refinancing paying existing debts/liens.

Unless you are a Realtor I wouldn't get a management agreement involved.

Good luck :)

Brian Gibbons · Answer

See

https://www.payingforseniorcare.com/legal/legal-do...

Brian Gibbons · Answer

See an Elder Care Attorney,

get Durable Power of Attorney for Asset Management.

Does she have an existing will?

@Ryan D.

@Bill Gulley

Ryan Dossey · Answer

I am a Realtor. If I buy half of the "interest" can I make the payments on the mortgage? Or would that trigger DOS clause? I have them digging through old boxes looking for a copy of the mortgage to see if there is one. Being a big bank I'm willing to bet that there is.

Ryan Dossey · Answer

There is no will. Granddaughter and her son are the only heirs. The son has ZERO interest in the property.

They are working on the DPOA with the attorney on staff at her treatment facility.

Ryan Dossey · Answer

Additional fact home has a .5 bath and two extra "bonus" rooms in the basement. So it should be easy to keep rented.

Can we turn this into a deal?

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