How do I help my father move out of a dangerous house?
October 28, 2018 12:04 PM   Subscribe

My dad has asked for my help in getting him out of a house that is filled with mold. He still owes a lot of money on it and I need to know how to get rid of the house with minimal financial losses as he is at retirement age. I don't know where to start.

My dad has a two bedroom house in northern Kentucky that is falling apart. The basement has leaked badly for years, is extensively water damaged, and is infested with mold. The driveway has sunk six inches into the ground and the stairs that lead to the side door have collapsed. There are also problems with the pipes leaking. The water heater is broken. The upstairs, where he lives, does not have visible mold but is open to the basement which is covered in mold and has mushrooms on the floor.

My dad has agreed to move out of his house and is open to that happening as early as this spring. This is moving very, very fast for him (he has seemed depressed for a long time). I will be trying to move that up as much as possible as I am worried about how the mold has/could affect his health.

My dad still owes ~$42,000 on the house. His monthly payment is $500. Because it's basically falling apart I don't think it's a good idea to sink any more money into it. He has a new car that is paid off and as far as I know he he does have a 401(k). He regularly gives money to my sister, who is struggling financially.

What do I do? The problems are so extensive I don’t know where to start. Which professionals do I hire? Any advice will be appreciated.
posted by heart's ease to Work & Money (19 answers total) 4 users marked this as a favorite
You could stop paying the mortgage, let the bank foreclose, and walk away. This is the simplest solution if you could live with the credit hit.
posted by crazycanuck at 12:19 PM on October 28, 2018 [14 favorites]

What's the location like? The lot itself might be worth a good portion of what he owes. Consult a realtor to find out what it's worth sold "as is"/as a teardown
posted by donnagirl at 12:22 PM on October 28, 2018 [9 favorites]

The bank may have recourse to his personal funds depending on the state, situation, etc. This is a fairly complex question. I don’t have the answer but a local real estate attorney might.
posted by Rock 'em Sock 'em at 12:24 PM on October 28, 2018 [7 favorites]

From the sounds of it, this house may need to be sold as a teardown. That sucks, but it's not necessarily that unusual. There are procedures in place for these situations. It's not unusual to sell a house that you still owe money on either—the bank will take their cut, but again that's normal.

I'd start by talking to a realtor. You may not want to get serious until the spring or anyway after your dad is out of the house, but you can at least have the first conversation now so that you have some notion of how it will go.

If your market is anything like mine, someone will snap up the property, tear down the house, and build a new one on the land. Or maybe it just needs extensive renovation—can't really tell you from here, but a realtor will connect you to people who can.

Don't despair, you can do this. The property is worth what it's worth, which is almost certainly not nothing even if the building itself is a loss. Find out how much that is and plan accordingly.
posted by Anticipation Of A New Lover's Arrival, The at 12:29 PM on October 28, 2018 [10 favorites]

KY is a recourse state, which means that the mortgage company could come after him if he did a strategic default. As a practical matter, odds are they won't. If he is anywhere within commuting distance of a decent sized town he might be able to break even on selling as the lot may have value. Definitely have a couple of Realtors take a look and give you an idea of what the market is.
posted by COD at 12:32 PM on October 28, 2018 [4 favorites]

As an admittedly optimistic example, a building inspector I was speaking to recently told me that his town had teardowns starting at $500,000. (He seemed to think that I would find this enticing in my own house search, for some reason. My budget was half of that, for a house that I could actually live in.) This was in one of Boston's tonier suburbs so it's pretty unlikely that your dad's property is worth that much, but my point is that there is probably at least some value there.
posted by Anticipation Of A New Lover's Arrival, The at 12:42 PM on October 28, 2018 [1 favorite]

You should consult an attorney who can advise on both jinglemailing the keys back to the bank, and the bankruptcy option. (In KY, bankruptcy may or may not solve the recourse issue; I have no idea.)

However, the house is just one element of a larger question, which is your dad;s future. What is his plan for housing after this house is dealt with? What is his credit like for future rental applications? Were it me, I would give very serious thought to finding a rental , moving in, and then ceasing the mortgage payments and doing the BK. He needs to be able to pass the credit check to secure housing.
posted by DarlingBri at 12:47 PM on October 28, 2018 [8 favorites]

This is moving very, very fast for him (he has seemed depressed for a long time). I will be trying to move that up as much as possible as I am worried about how the mold has/could affect his health.

Beyond basic respiratory health concerns,

"People who live in moldy environments may also have more depression, finds a study of 5,882 adults living in 2,982 households... About 40% of the residents lived in visibly damp, moldy households, and overall their risk for depression averaged 34–44% higher than that for residents of mold-free dwellings."
posted by Iris Gambol at 12:49 PM on October 28, 2018 [4 favorites]

I also thought the mold was contributing to his depression, fwiw.
posted by jbenben at 1:16 PM on October 28, 2018 [1 favorite]

Well, living in a falling-down house that was probably slowly killing me and which I couldn't take care of but still owed a bunch of money on would certainly make me depressed, regardless of whether or not mold spores were getting into my brain or whatever. It may very well be that this house is something of an albatross around your father's neck and thay getting him out of there will do wonders for his state of mind. I think you already know that though, hence why you're trying to get him moved out ASAP.
posted by Anticipation Of A New Lover's Arrival, The at 1:34 PM on October 28, 2018 [1 favorite]

You have a couple of key missing variables: (1) how much is the real estate worth (in tear-down condition); and (2) what savings and/or government benefits does he have? If the real estate is worth more than $42k, then he has equity value in the real estate - so paying the mortgage is not necessarily "throwing money away" because he'll get most of the money back when he sells the dirt. If the real estate is worth less than $42k, then maybe you/he want to explore ditching the property and leaving the bank with it, but have others have noted, this can impact his credit and/or leave him open to the bank suing him.

One place to look for help is legal aid programs - a lawyer experienced in elder issues and bankruptcy, for example, would have seen many cases like this one. There is a KY legal aid programs page here that looks promising.
posted by Mid at 2:36 PM on October 28, 2018 [1 favorite]

Thank you so much everyone. I intend to have him move into a rental before anything else happens as his health is the greatest priority here. So it looks like I should talk to a realtor and a real estate attorney.

Do I also need to talk to some sort of financial adviser? Should I ask my father to see a respiratory specialist? Another type of doctor? He doesn't have much respect for the discipline of psychology, so a therapist/psychiatrist is probably off the table for the time being.

Would any other professionals be helpful to handle different aspects of this problem?
posted by heart's ease at 2:45 PM on October 28, 2018

Vacant lots in the immediate area go for around $10,000. Right now I don't know how much he has in his 401(k) or in savings. I don't believe he gets any government benefits. He is not drawing Social Security yet.
posted by heart's ease at 2:48 PM on October 28, 2018

First things first, though...Do you have Power of Attorney for your father? If you intend to muck about in his financial affairs, you’re eventually going to need something in-hand to prove you have authorization. This would especially be true if, god forbid, your father develops a repiratory infection that requires hospitalization.
posted by Thorzdad at 3:10 PM on October 28, 2018 [3 favorites]

Sounds to me like that other stuff is probably up to him? What's your overall goal here—are you helping your father out of a jam and then letting him run his own life, or are you taking over his life for him with his best interests in mind? Presumably he's a functioning, mentally competent adult even if he's struggling with some health and financial issues right now. I haven't seen anything here that makes me think he's not, anyway.

If you're going to run his life for him, you'll need to sit down with him and a lawyer and come up with a legal agreement that gives you the authority to do that. Otherwise you're free to give him advice, but he's also free to ignore it or modify it as he sees fit. He's a grown man—just because he's depressed doesn't mean he doesn't have a right to make his own decisions, even bad decisions. Just bear that in mind.

Now with all that aside, I think he ought to see a doctor for his respiratory issues. I'd start with his PCP and refer out from there as needed; if he's neglected his health as much as he's neglected his house, it might be best to start out with a general check-up and proceed from there. I'd also encourage him to sit down with a fee-based financial advisor and go over his financial situation (even before he sells the house) to come up with a plan for the next several years at least.

And finally, I'd try to help him find an activity—ideally one that has both physical and social components like maybe some dance classes—that he thinks might be enjoyable. Dude sounds like he probably needs something to do, something to give him a reason to get up in the morning. If that could be something that was both good for his physical health and which got him out and mingling with other people (a lot of older folks seem attracted to dance classes for these reasons) then that would be ideal and would probably help him out with his depression.

Remember that he's an adult, though. It's still his life to live.
posted by Anticipation Of A New Lover's Arrival, The at 3:29 PM on October 28, 2018 [1 favorite]

In the event that your dad's property is worth less than what he owes on it, there is such a thing as a "short sell," wherein the bank agrees to accept a lower sale price than the value of the debt, presumably because they don't think they're ever going to get more than that. I don't know too much about the process here, but it's a thing. It would be something to discuss with the realtor.
posted by Anticipation Of A New Lover's Arrival, The at 4:57 PM on October 28, 2018 [1 favorite]

You might want to call Greenpath's foreclosure advice hotline. Greenpath is a nonprofit that helps people in financial trouble and they have been recommended many times on the green. They have a hotline for people in danger of losing their house. The webpage is written with a focus on helping people stay in their homes if possible but I'm sure they have a lot of expertise in helping people who need to get out from under mortgages they can't afford. And they would know the ins and outs of various options. Since they help people negotiate with creditors, maybe they even could help navigate negotiations with the bank.

I contacted them once via their on-line chat to see if they could help someone who didn't fit any of the categories. The person was very helpful and encouraging and said, in my case, that they would be happy to help. So I would encourage you to call. There is no charge for their services.
posted by metahawk at 7:44 PM on October 28, 2018 [1 favorite]

Sounds to me like that other stuff is probably up to him?

It is, and that's important for me to remember. It seems that being depressed and the stress of the house has resulted in what amounts to paralysis. My plan is to relieve a bit of that burden by doing legwork, e.g. I've found 2 apartments in his price range that are close to his work and town, now he'll decide if he's interested in them.

Thank you all again for your answers, you've been a big help.
posted by heart's ease at 6:05 AM on October 29, 2018

It's smart to get the rental situation locked down before allowing his house to go in to foreclosure, as it might be harder to secure a nice rental property after his credit gets dinged from the foreclosure. Good luck!
posted by Larry David Syndrome at 1:14 PM on October 29, 2018

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