Medicaid and Home Foreclosure
My father recently had a stroke and is in Nursing Rehab. My mother, a breast cancer survivor, had to be hospitalized recently because of a high fever and low WBC count. She is undergoing tests, but all signs point to cancer again. Both are headed toward some type of Long Term Care.
They have been unable to pay their property taxes for over a year, and recently decided to stop paying their mortgage (because they can't afford to any more). Before they became ill, the plan was to pay down some debts, save up for a security deposit for an apartment, allow the bank to foreclose on their house, and move somewhere more affordable.
Now, however, we are trying to figure out how to coordinate the loss of their home, with their ability to qualify for Medicaid. They have zero equity in the home, it is in a state of beyond disrepair, and there is a lien on the home for the unpaid property taxes.
When I spoke to their county Medicaid office (in the state of NJ), they said the home would have to be up for sale if the foreclosure was still pending, in order for them to determine if it is an asset. We don't want to go through the trouble of trying to sell the home, since we are almost positive there is no equity. If we call the bank and say we're just going to sign over the house to them, will this have a negative effect on their Medicaid eligibility? Any experience anyone has with Medicaid and home sale/foreclosure would be helpful. Thanks!