Give Me Money For Someone Else's Stuff.

July 4, 2008 5:20 AM

I am my mother's legal guardian. Can I get a loan to pay her bills using her property as collateral?

I need to raise almost $3000 within 30 days or bad things will happen.

Last year, my Mom had a stroke. She is pwned in the head and I am her guardian.

I own nothing except a car; selling it is a last resort.

Mom has two houses -- my childhood home and the one she inherited from my grandmother just before her stroke. Because she owns two houses, she is disqualified from receiving any kind of assistance. I am trying, unsuccessfully, to sell the grandmother-house. It is the remainder of the mortgage on the grandmother's house -- $2,673.90 -- that I need to come up with, or they will foreclose.

I am extremely broke; I quit my former job to take care of mom and now work odd freelance jobs for not-enough-money. I was counting on the sale of the grandmother house (it's appraised at almost $300k) to get us through, but it's not happening.

Could I get a loan with grandma's house as collateral, even though I do not own it? I have mom's power of attorney.

If that won't work -- would it be worth it to take one of these credit card offers that arrive in a deluge and pay off the mortgage? I hate the idea of accruing more debt, but things are really damned dire.

Any other suggestions for raising that kind of money speedily are welcome. Anyone know a good pimp?

posted by Gianna to work & money (13 comments total)

Try a reverse mortgage. It is a way of selling the house bit by bit, but you get to keep it until Gma shuffles this mortal coil.
posted by Gungho at 5:32 AM on July 4, 2008

Another option is to organize a quick estate sale. The furniture in the house could be worth at least that much.
posted by Gungho at 5:33 AM on July 4, 2008 [1 favorite]

The whole point of the power of attorney is that you can sign in your grandmother's name -- so she takes the loan and not you. Similarly, it gives you the ability to write checks on her bank account, etc.

A reverse mortgage isn't a bad idea in principle, but they are very expensive, and if your mother is near death they aren't any kind of long-term solution, since her death will mature the obligations and might force a sale under very unfavorable terms. Depending upon who holds your mom's second-house mortgage and servicing rights, you may be able to negotiate a restructuring of some of your payments or present delinquencies, particularly if your mother seems to have a lot of equity.

It's seems clear that you are in a bit over your head -- you ought to seek out some professional advice and assistance. I'd start with your local government senior center, who will have referrals to accountants and attorneys who (alas) see this kind of thing all the time. Given the houses, you should be able to negotiate a fee schedule that won't put you out of pocket until you've been able to sell the second pocket.

One thing that a frank and honest adviser will tell you is that there are plenty of places in the country where a $300,000 appraisal is simply illusory -- a home is worth what you can sell it for on the open market now. If selling the house is essential to provide for your mother's needs (whether through generating cash or creating eligibility for assistance) than you may well just have to sell it for what you can get for it.
posted by MattD at 5:55 AM on July 4, 2008 [1 favorite]

sell the second house. Hopefully you aren't having to sell your pockets!
posted by MattD at 5:56 AM on July 4, 2008

Do you have a credit card? We are talking about the price of a plasma screen TV here. I think I'd credit card the rest of the mortgage and make the minimum payment (which will be less than $100 a month) until I can sell the house. You are talking about a couple hundred dollars of interest over a few months as your total cost. That is going to be way cheaper than any mortgage type loan you can get. If you have good credit you can probably get a credit card with a $3000 limit instantly online somewhere.

If not that, how about a relative or friend?

Another thought - have you tried talking to the bank that has the mortgage? Foreclosure is expensive for the bank. It will cost them way more than the $2693 to foreclose the house. They should be willing to work something out with you and let the interest accumulate until you can sell.
posted by COD at 7:15 AM on July 4, 2008 [1 favorite]

If the grandmother house has been on the market for a while and you are in dire financial straits it's time to make a sizeable price reduction. A house is only worth what someone is willing to pay for it, and that price is very often not the appraisal rate. Has your real estate agent brought up the subject of price reduction yet? If so they are on the right track, if not ask them to do it immediately. Have you had open houses, and an agents tour? If you are doing the sale on your own it's time to get a real estate agent.

Since the plan has always been to sell this house, to have a nest egg, then maybe getting a credit card to pay off the remainder of the mortgage isn't a bad idea. With a price reduction likely bringing you a quicker sale you'd be able to pay off the cc before it becomes a burden itself.

I'm wishing you all kinds of good luck!
posted by zarah at 7:19 AM on July 4, 2008

Is it possible to sign the grandmother's house over to YOU? That way, your mother would only have one house and qualify for assistance.
posted by Cat Pie Hurts at 7:24 AM on July 4, 2008

How much is still owed on the 2nd grandma house if she still has a mortgage on it?
posted by mathowie at 7:47 AM on July 4, 2008

Isn't it the $2,673.90 she needs to raise immediately?
posted by zarah at 8:08 AM on July 4, 2008

Is it possible to sign the grandmother's house over to YOU? That way, your mother would only have one house and qualify for assistance.

Jesus, no. You will be totally fucked if you do that. The laws around Medicaid for long-term care recently changed and are dramatically more draconic than they used to be.

You need to talk to an elder-care attorney in your state NOW. It is possible that your plan of selling the grandma-house to take care of both of you might also render you totally fucked.
posted by ROU_Xenophobe at 8:27 AM on July 4, 2008

You need an elder law attorney ASAP. The National Academy of Elder Law Attorneys has a searchable database to help you find one near you. There are numerous planning strategies that can help you preserve your mother's assets, but you will definitely need an attorney's help. It will be money well spent--they can save you literally hundreds of thousands of dollars if consulted early enough in the planning process.
posted by HotToddy at 9:12 AM on July 4, 2008

Talk to the bank, they do not want a foreclosure and that is a very small sum for them. I'm sure they will cut you a deal somehow.

Failing that I'd put it on a credit card for now too. Even though I hate credit cards, this seems like a good time to borrow some money.
posted by fshgrl at 3:21 PM on July 4, 2008

IAAL (but not yours). HotToddy (and others') advice is spot on: get thee to National Academy of Elder Law Attorney.
posted by webhund at 8:50 PM on July 4, 2008