Question about home equity line of credit

[Beatlelvr]

I'm hoping someone has an answer to this:
So mom is almost 99, living at home with me, and full time caregiver at $400/day, $600 on holidays. For 5 months, we have been able to handle the fees from both of our accounts. Now we need to look for funds, and since she owns her home we thought home equity line of credit through our credit union a good idea. After waiting over 2 and a half months for an answer, they tell me "the title company does not wish to proceed." Huh? They have no more information.
We have no debt, adequate income from pensions and social security, house is paid for, good credit scores. Am I missing something here? The only thing I can think of is, since its for mom's care, and we won't need it when she's gone, do they think it isn't worth it to them because they won't get much back in interest?
I hope someone can enlighten me. I'm quarantined right now, but I WILL be cashing out from them when I can. Just unprofessional in my opinion.

[uponit7771]

1. Hmmm, don't they have to give you a written report with more of a official answer? Not doing such

... could lead to unconscious bias

[okaawhatever]

4. Yes for lender, but not title company. nt

[7wo7rees]

2. I would venture to guess it is your mother's age.

Been dealing with these issues a couple of years now.
But, it's just a guess based on my experience.
Were you trying to get home equity loan on your mother's house?
Ms7wo7rees

Good luck. Caring for elders is incredibly expensive.

[Beatlelvr]

10. Okay, had not thought of that

But both our names are on loan, I'm 70.
Yes, mom's house, paid off 30 years ago.
In her name in living trust. Maybe that's the problem.

[Beatlelvr]

11. And I do have POA

[7wo7rees]

16. Yes. That is exactly it.

My mother's house, paid off for years, in a very hot market in North Dallas. Her bank flat out said no and that was early last year. I could not make anything happen.

It's in a revocable trust and I'm trustee, guardian, POA, everything.

So very sorry you are going through this. I don't have any advice to give. I had to put my mother in assisted living 3 weeks ago and to pay for where she is, I have to sell house.

Had I known what I was doing 5 years ago when I started this adventure I should have had her put house in my name/sell to me and then I could have gotten the home equity loan. Now it is too late. Rules with Medicare/Medicaid and all.

Like I said...... "just based on my experience...."
And my mother is only 86, but with dementia. 5 years ago she had not yet been tested and diagnosed.

[Phoenix61]

3. I would guess it's her age.

It’s not an unusual problem.

[onethatcares]

5. is a reverse mtg a workable solution?

Just a thought.

[dixiechiken1]

12. This is what I was thinking...

My mother did a reverse mortgage on her home and it accomplished exactly what we needed it to accomplish: she was able to stay in her home until the day she died. Yes, the fees are expensive but we didn't care. Our only concern was that she got to stay in her home. Mission accomplished.

Some questions to consider: In whose name is the house? Do you live with her? Are you counting on staying there after she's gone or do you have your own home?

Reverse mortgages aren't right for everybody, but they're not evil incarnate as some would have you believe. It all depends on someone's individual circumstances and goals. My husband and I have no children, so no heirs. A reverse mortgage is part of our retirement plan.

Best of luck to you and your mother.

[okaawhatever]

6. It's the title company not the lender who said no. It's probably

Because of her age, and worrying heirs will sue them when mom passes away. It’s hard to prove sound mind and body for a 98 year old, especially if they need constant care.

[moonscape]

7. Like @onethatcares, I was thinking

reverse mortgage. That would cover you but down side is they are expensive (fees) and the equity taken out plus interest become payable upon your mother’s death. You either have to have the funds to cover, or sell the home and pay from proceeds.

[3Hotdogs]

8. Reverse. is the worst option. But if there is no other.

Do you have power of attorney? Was she or her husband WW 2 Vets?

Before trying reverse, try for a refi. at a traditional (shit)bank. BoA or Wells Fartgo.

Does she have clear title? No outstanding primary mortgage?

[alwaysinasnit]

9. I don't know the state you are in, but in CA you can apply for state benefits once most assets have

been depleted (the house where the applicant lives in doesn't count). CA basically advances funds against the value of the house and it will be reimbursed through the probate process. You might want to check to see what senior services are provided by your state. Good luck!

[Mr.Bill]

13. You say she is living with you,

why not just sell the house? Are there other children involved?

[Beatlelvr]

22. Yes, a possibility

But, I need to find somewhere else to live, mom needs somewhere else to live. Moving a 98 yr old woman out of her home is no easy task. And she may pass right in the middle of it.
I have one surviving brother who works closely with me and all of these issues.

I do not want a reverse mortgage...too complicated, house appraisal, etc.

I may just take out a personal loan and get repaid after the house is eventually sold.

[Mr.Bill]

23. Oh, I see. I thought no one was living in it and you and

mom were living in another house that was yours.

[Corgigal]

14. I don't know who you're using,

and I don’t understand why they won’t proceed, but…I guess that an answer.

I used Rocket mortgage the last time, got an answer in under ten mins.
While we’re not your moms age, we’re in our mid 60s. It all worked out.

Good luck.

[Fiendish Thingy]

15. If it's the title company, and not the credit union balking, you can pick another title company

Unless the problem is with the title to your mom’s home, in which case you have a bigger problem.

As long as the title company gets paid, they shouldn’t interfere with your business with the credit union. If there’s a problem with the title (outstanding liens, etc) that would show up in the report that they were paid to provide.

Good luck.

[Mosby]

17. Shop around.

HELOCs are going away, banks don't make enough money on them, but they are still out there. I don't know what the title company has to do with anything.

Eta - you want to tell the lender that your doing upgrades to the house with the money.

[Beatlelvr]

20. That's just what the teller told me to say

He said it would not go through if we said it was for her care. We had to say " home improvements". ??

[Mosby]

24. If the house still has a mortgage

You could refi and take cash out.

[KentuckyWoman]

18. Please I beg you talk to an eldercare attorney before you mortgage her home.

You can call 211. It goes straight to United Way. They get a bad wrap sometimes but they are a clearinghouse for programs.

Call your local counsel on aging. You can find yours by putting your zip into the search at this website.

Check out all of these Federal and state programs


MEDICAID RULES
Please consult an eldercare estate attorney before spending down the value of Mom's home.

The home is not counted as an asset for Medicaid eligibility purposes if the equity is less than $595,000 (in 2020) ($893,000 in some states). In all states, you may keep your house with no equity limit if your spouse or another dependent relative lives there.

*****

"caretaker child," who is defined as a child of the applicant who lived in the house for at least two years prior to the applicant's institutionalization and who during that period provided care that allowed the applicant to avoid a nursing home stay.
While you can sell your house for fair market value, it may make you ineligible for Medicaid and you may have to apply the proceeds of the sale to your nursing home bills.

*****

Under most circumstances when Medicaid eligibility is determined, your family member’s home equity will be excluded from their net assets so long as they are living in the home. However, once the value of the home has been liquidated through a home sale, the proceeds of the sale will most likely be included in their net assets. Therefore, it is quite possible that your family member may no longer meet the financial eligibility requirements in their state of residency following the sale of their home.

[7wo7rees]

25. Excellent advice. All roadblocks I've run in to.

I thank the gods I did get estate attorney involved in 2017.
Thought I had every t crossed and i dotted and I still missed a few.
Hindsight......
Ms7wo7rees

[Buckeyeblue]

19. I think they are out of compliance with reg B

Essentially they need to provide you with an adverse action letter if they decline your loan application.

The title company is only there to ensure there are no legal issues with the property.

I would go to a bigger bank. Credit unions are typically great. But some of them are flakes the fly under regulatory radar.

They can't discriminate against your mother because of her age. That's clearly laid out in the fair lending act (reg B).

[Beatlelvr]

21. Interesting!

And yes, the least I should get is a formal letter explaining the decision.