Medicaid lien release

[Darron Stewart]

How is a Medicaid Lien released on a property sold at tax sale?

[Boyd McClean]

what you have to do is contact the department that put the Medicade lien against the property. I ran into this problem in Texas and had to contact the State Attorney General. Since Medicade is a Fed program that the states administer it in essence becomes a federal lien.

In my case the State would not release the lien until the total cost of the owners medicade bills had been paid. If there is equity in the property they will just sit on it until the billis paid. This lien will stay with the property until paid. Also since the owner of the property was in a nursing home and that was considered her legal residence, then she had no right of redemption as she no longer had homestead rights.

It is best to move on and not fiddle with it. If you hire a lawyer to handle the matter it will cost thousands because of the time involved.

The only time this will vary is if the property owner dies and you can show the SAG that the value of the property is decreasing in value, will they then negotiate.

[Mehran K.]

Not sure, but maybe @Ned Carey or @Ankit Duggal might now. They deal with tax liens often.

[Dion DePaoli]

State law will dictate priority of said lien.  You will have to look it up with the state the Subject Property is located in.  

[Jon Holdman]

To follow up to @Dion DePaoli if the medicare lien is senior to the tax lien, it won't get released at all.  There may be other liens senior to the tax lien, too.

[Boyd McClean]

what you have to do is contact the department that put the Medicade lien against the property. I ran into this problem in Texas and had to contact the State Attorney General. Since Medicade is a Fed program that the states administer it in essence becomes a federal lien.

In my case the State would not release the lien until the total cost of the owners medicade bills had been paid. If there is equity in the property they will just sit on it until the billis paid. This lien will stay with the property until paid. Also since the owner of the property was in a nursing home and that was considered her legal residence, then she had no right of redemption as she no longer had homestead rights.

It is best to move on and not fiddle with it. If you hire a lawyer to handle the matter it will cost thousands because of the time involved.

The only time this will vary is if the property owner dies and you can show the SAG that the value of the property is decreasing in value, will they then negotiate.

[Darron Stewart]

@Jon Holdman @Mehran K.  Thanks for the feedback, update, called medicaid lien office and was told they are determining a percentage to settle and clear the liens, since so many properties now have liens and are being let go to the point of being condemned.  So speculating they will settle for 10-25% of value with investors, they already know heirs typically just walk away and something is better than nothing.

[Ned Carey]

It will clearly vary by state law, "priority of liens" as @Dion DePaoli said. However I suspect they get wiped out in a tax foreclosure. The debt by the previous owner still remains. The tax foreclosure only removes the debt as a lien against the property. Medicaid would be notified and they have the right to redeem to protect their interest. 

That is my best guess above, but property tax lien law varies tremendously by state and sometimes even county.

[Darron Stewart]

@Ned Carey Based on conversations today, they may be notified, but do nothing since they have seniority and just basically lie in wait until someone wants to clear title, although the lien clearly states they will collect upon sale, transfer, death, etc.  Since all three typically have occurred after tax sale, seem like they are setting them self up to lose, either by transfer or folks just abandoning property.  So even after plenty of talking with tax office, medicaid, and lawyer, still kinda fuzzy what the outcome could be. 

[Ned Carey]

Originally posted by @Darron Stewart:

 they may be notified, but do nothing since they have seniority

 I suspect you are right that they will not respond but that may not be because the  have a superior lien. Keep in mind some of this stuff may be fuzzy because it has never been challenged up to the highest level of the state courts so that no precedent has been set yet. Be sure the lawyer you speak with is a tax sale attorney. A good tax sale attorney should not only know tax sale law inside and out he should be willing to search for court precedents on such matters if the statues area not clear.

[Darron Stewart]

Thanks for the feedback @Ned Carey   Just thinking they dont want to manage hundreds of thousands of properties, so will how it goes from here.  Many more fish er houses to catch out there if these don't pan out.

[Account Closed]

Has anyone tried to buy Medicaid liens before?

[Rich Hupper]

@Account Closed I am currently dealing with a lady who has racked up some time in a nursing open where medicaid has paid for it.  At the time she entered the nursing home she only had title to one parcel of land, her primary residence. She entered the nursing home about 3 years ago and they have been garnishing her pension to pay for the care. In may of 2017 she had a medicaid lien attached to her primary residence. In October of 2017 she recently received title to a another piece of land from a family trust.

Would this second piece of property be subject to the already recorded lien?

Thank you

[Ned Carey]

@Rich Hupper Probably not but it depends on the nature of the lien.  In MD and most states if you have a judgment against someone it automatically attaches to any titled property; real estate, car, boat, plane etc. 

So if there is a Lien filed specifically against one property, like a mortgage, it would not affect another property. However if it is a judgment which automatically attached to the first property it would also attach to the second. 

A title company would be able to find the answer. Generally the process is get the property under contract subject to being able to get clear title.  Take the deal to the title company who will do a title search, If there is an issue then either walk from the deal or negotiate. 

The lien holder may accept a partial payoff to release that property from the lien.

[Rich Hupper]

@Ned Carey  thanks for the reply

The way the recorded lien reads is as follows: " the commonwealth of massachusetts, pursuant to MGL C 118E S 34 and MassHealth regulations at 130 CMR 515.012(A), hereby asserts a lien for the cost of medical assistance paid or to be paid against all property and rights to all property in Middlesex county, including the property more fully described......"

The way this reads it sounds like the lien applies to everything she has rights to even the second property she acquired through gift. It also sounds like this lien has the ability to increase in value depending on how much medicaid she uses. 

Lets say she agrees to sell the property to me for what is owed but continues to need medicaid and stays at the nursing home. We pass title and she stays in the nursing home for another 2 years, up until her death. All the meanwhile I have renovated and flipped the house. Could the state look to lien the home again for the 2 years worth of nursing care despite it having a new owner?

[Steve Babiak]

let's see if 

@Clay Lingg can offer suggestions on moving forward with the Medicaid lien in place. My guess is that this Medicaid lien is going to attach to any and all property, sort of like a judgment - because the lawmakers want the government to get paid therefore I presume they would set it up to go after any property.

[Ned Carey]

@Rich Hupper that is too specific for me to reply. I don't know Mass. law. nor am I an attorney

[Wayne Brooks]

It’s sort of clear “all property in middlesex county”.

[Wayne Brooks]

You’d have a hard time flipping it, assuming it’s in middlesex county, since it Now has this lien against it already.

[Rich Hupper]

@Ned Carey no problem thanks for taking a look anyways. 

@Wayne Brooks I was hoping if I paid off the current lien on the property, they would not be able to reattach a new one to the property where there would be a new owner. However it looks like the state has the ability to affect title of future owners? 

[Account Closed]

Does anyone know where you can find a list of medicaid liens?

[Marie DAWSON]

Can anyone tell me what I might be getting my self in to I'm living in my brothers house that his in laws family gave him and I have been paying the taxes on it for the last seven years and the people who owed have past away and my brother passed away also I don't know what to do or who to contact I would really like to see this place in my name but I was told that there is a lien on it from Medicare  and I was also told they are not going to do anything with it cause it is in a flood zone which is true I've been flooded six times now I really want to keep the house in the family for his children sake any information is greatly appreciated thank you

[Darron Stewart]

Any lien holder will settle for less than is owed, simply point out the obvious point that it floods and let them know that you may consider walking away unless a reasonable settlement can be reached, such as 10-25% of what is owed.

[Rickey Lane]

Ok I’m trying to buy a house that has been condemned by the city. The owner is in a nursing home which is being funded by Medicaid. How do you buy this house so the lady doesn’t become non funded by Medicaid?