Law for Life Blog

Holiday Blues - Depression in the Elderly

mbrickley@gosselinlaw.com (Melissa Brickley) — Thu, 06 Nov 2008 13:49:54 -0500

The holiday season is quickly coming upon us. If you are a caregiver for an elderly loved one, you may notice a change in your loved ones mood as the holidays approach. Perhaps you are one of many, who visit elderly parents and family during the holidays who live a distance away. When you visit you may notice that loved ones are not as physically active, or they show symptoms of fatigue or sadness and have no interest in the holiday or in their surroundings.

According to the National Institute of Health; of the 35 million Americans age 65 or older, about 2 million suffer from full-blown depression. Another 5 million suffer from less severe forms of the illness. This represents about 20% of the senior population - a significant portion.

Depression in the elderly is difficult to diagnose and is frequently untreated. The symptoms may be confused with a medical illness, dementia, or malnutrition due to a poor diet. Many older people will not accept the idea that they have depression and refuse to seek treatment.

What causes depression in the elderly?

It is not the actual holiday that causes depression, but the fact that holidays tend to bring memories of earlier, perhaps happier times. Additional contributing factors that bring on depression may be the loss of a spouse or close friend, or a move from a home to assisted living, or a change with an older person's routine.

Depression may also be a sign of a medical problem. Chronic pain or complications of an illness or memory loss can also cause depression. In addition, diet can also be a factor when proper nutrition and vitamins are lacking.

As an example, Selma's husband passed away a few months before Christmas. Her family lived close by and would call or drop in often to check on her. Selma seemed a little preoccupied and tired, but this was to be expected as she had been the caregiver for her husband for many years. It wasn't until the family noticed that her holiday decorations were not our and her yearly routine of Christmas card writing was not happening that they began questioning her mental and physical well being.

A trip to her physician confirmed depression, caused by not only the loss of her s spouse, but a vitamin B12 deficiency. There were both mental and physical reasons for her depression.

Symptoms to look for in depression might include:

Depressed or irritable mood
Feelings of worthlessness or sadness
Expressions of helplessness
Anxiety
Loss of interest in daily activities
Loss of appetite
Weight loss
Lack of attending to personal care and hygiene
Fatigue
Difficulty concentrating
Irresponsible behavior
Obsessive thoughts about death
Talk about suicide

How do you know if it is depression or dementia?

Depression and dementia share similar symptoms. A recent article on helpguide.org gives some specific differences:

In depression there is a rapid mental decline, but memory of time, date and awareness of the environment remains. Motor skills are slow, but normal in depression. Concern with concentrating and worry about impaired memory may occur.

On the other hand, dementia symptoms reveal a slow mental decline with confusion and loss of recognizing familiar locations. Writing, speaking and motor skills are impaired and memory loss is not acknowledged as being a problem by the person suffering dementia.

Whether it is depression or dementia, prompt treatment is recommended. A physical exam will help determine if there is a medical cause for depression. A geriatric medical practitioner is skilled in diagnosing depression and illnesses in the elderly. If you are a care taker of an elderly person it may be beneficial for you to seek out a geriatric health care specialist.

Treating depression in older people

Once the cause of depression is identified, a treatment program can be implemented. Treatment may be as simple as relieving loneliness through visitations, outings and involvement in family activities. In more severe cases antidepressant drugs have been known to improve the quality of life in depressed elderly people. Cognitive therapy sessions with a counselor may also be effective.

As a caregiver or family member of a depressed older person, make it your responsibility to get involved. The elder person generally denies any problems or may fear being mentally ill. You can make the difference in and remove the Holiday Blues from seniors suffering from depression.

The Geriatric Mental Health Foundation offers a "Depression Tool Kit." To read more about the tool kit and depression in the elderly, click here.

HUD Issues HECM for Purchase Guidance

jgosselin@gosselinlaw.com (John Gosselin) — Tue, 28 Oct 2008 15:08:30 -0500

Yesterday, the Department of Housing and Urban Development issued Mortgagee Letter 2008-33: Home Equity Conversion Mortgage Home Purchase Program.

Key points, include:

HECM for purchase transactions, for which the FHA case number is assigned on or after January 1, 2009, must satisfy existing program requirements and the provisions of this Mortgagee Letter.
HECM borrowers must occupy the property within 60 days from the date of closing. Lenders are required to ensure all outstanding or unpaid obligations incurred by the prospective mortgager, in connection with the HECM transaction, are satisfied at closing.
Only properties where construction is completed, as defined in Mortgage Letter 2007-06, are eligible.
Ineligible property types include: cooperative units; newly constructed principal residence where a Certificate of Occupancy or its equivalent has not been issued by the appropriate local authority; boarding houses; bed and breakfast establishments; existing manufactured homes built before June 15, 1976; and existing manufactured homes built after June 15, 1976 that fail to conform to the Manufactured Home Construction Safety Standards.
To avoid cases of property flipping, lenders mus take steps to ensure that: a) only current owners of record may sell properties that will be financed using FHA-insured mortgages; b) any resale of a property may not occur 90 or fewer fays from the last sale to be eligible for FHA financing; and c) for resales that occur between 91 and 180 days where the new sale price exceeds 100% of the previous sale price, FHA will require additional documentation validating the property's value.
Existing HECM borrowers who participate in a HECM for Purchase transaction are ineligible for a reduction in the upfront MIP and lenders must enter the transaction into FHA Connection as a new HECM.
At closing, HECM borrowers must provide a monetary investment which will be applied to satisfy the difference between the HECM principal limit and the sales price for the property, plus any HECM loan related fees that are not financed or offset by other allowable FHA funding sources. In other words, the proceeds from the reverse mortgage and any funds from the sale of the old property (or from the borrower's savings) must be enough to purchase the new property outright.
Lenders will be required to verify the source of all funds prior to closing. A verification of deposit, along with the most recent bank statement, may be used to verify savings and checking accounts. If there is a large increase in an account, or the account was opened recently, the lender must obtain a credible explanation of the source of those funds. Such documentation must be provided in the FHA case binder. Failure to provide the necessary documentation may result in a notice of rejection and delay of endorsement.
Borrowers may not obtain a bridge loan (also known as "gap financing") or engage in other interim financing methods to meet the monetary investment requirement or payment of closing costs needed to complete the purchase transaction. This restriction includes subordinate liens, personal loans, cash withdrawals from credit cards, seller financing and any other lending commitment that cannot be satisfied at closing.
HUD-approved housing counseling agencies that have been approved to provide reverse mortgage counseling, must counsel those who anticipate using the HECM for Purchase option on all topics covered in this Mortgagee Letter and other HUD requirements and issuances.
The three-day right of rescission period is not applicable to HECM for Purchase transactions. Therefore, all initial advances may be disbursed on the day of closing by the settlement agent. However, FHA encourages lenders to seek their counsel's opinion to assure compliance with Federal or State laws.
Lenders are required to ensure the property, when used as collateral for the HECM, meets the following property requirements: 1) Is the borrower's principal residence; 2) Construction is complete and a certificate of occupancy or its equivalent has been issued; 3) Any construction loan financing for the property, which will serve as the collateral for the HECM loan, is satisfied and the HECM liens will be in a first and second lien position and, at the time of closing, no other liens against the property exist.
Instructions on how to enter HECM for Purchase transactions into FHA Connection Insurance Accounting Collection System will be provided in a separate instruction.

Listen to Your Elders - Ideas On Surviving an Economic Crisis

jgosselin@gosselinlaw.com (John Gosselin) — Fri, 10 Oct 2008 10:02:28 -0500

I have been working with older folks my whole life, first as a hospital volunteer, then in church and community groups, and for almost 15 years as an elder law attorney. One of the unique aspects of my work with older people is the wealth of personal history each and every person recounts.

I can vividly remember listening to my grand father talk about trench warfare in France in 1918, my father witnessing a kamikaze attack in the South Pacific, but the most recurring theme of all the stories from family and elder law clients is money. These stories inevitably started with the father of the family losing his job, the market collapsing and everyone in the family having to pull together to make the ends meet.

Yes, even the children worked to contribute to the family's well being.

Clothes were passed down from sibling to sibling.

Shoes were repaired (one pair for everyday, one pair for Sunday - when everyone went to church).

Meals were simple and shared as a family - candy and ice cream were special treats (few people would ever go to a restaurant, most of those were in hotels and meant for travelers). No need to diet, since food was for nourishment and not entertainment. Farmers came in to sell local produce; strawberries were for Summer, potatoes and squash were for Winter

Noone trusted one bank - best to keep money here and there and some "pin" money in cash.

There might be one car that was used until it stopped working - walking to school (even in foul weather) was the only way to get there.

Children shared toys, parents read aloud to their children after homework; women knew how to sew, bake, knit, play the piano and manage household resources; men mowed their own lawn (and maybe a wealthier neighbor's lawn for spare change), disciplined their children, worked two jobs, and respected their wives.

Grandma helped care for the young children (or were the children helping to care for Grandma?) She lived upstairs and when she died she was waked in the front room.

There were few brands. What things that were bought at the store were often only available in one color, flavor or style; but were of good and consistent quality.

The message really was simple. Be simple. Hold fast to your family. Find pleasure in your relationship with each other and with your God. Most of all, don't live beyond your means.

Sell Yourself 'Short' - The Short Sale Process, Procedures and Tips to Avoid Foreclosure

jgosselin@gosselinlaw.com (John Gosselin) — Mon, 06 Oct 2008 07:46:07 -0500

Gosselin Law's short sale group can be reached at 781-782-6000 or toll free at 877-325-6746. Gosselin Law has convenient office locations in Boston and throughout Massachusetts.

What is a Short Sale:

When a lender accepts a discount on a mortgage to avoid a foreclosure or bankruptcy.

Why a Lender Would Take a Discount:

They do not like excess inventory or bad loans on their books;
Loss mitigators have incentive to clear up defaulted loans - short sales help do that; and
Lenders know they can lose more money if a home goes to auction.

Lender "Short Sale" Factors:

Whether the seller deserves a break due to: financial hardship caused by unforeseen circumstances (layoffs, divorce, illness, etc.);
Whether it would be cheaper to repossess the home, fix and sell;
How many other properties the lender has in default; and
If co-signers are on the loan and can help pay the mortgage balance.

The Short Sale Process:

Acquire a professional (such as a real estate attorney) with short sale experience.
Contact the lenders 'loss mitigation department' to discuss the possibility of a short sale and determine the lenders process for completing the sale. This sometimes involves acquiring a 'Short Sale' or 'workout' packet.
Seller must issue a signed 'Release' or 'Authorization to Release Information' to authorize the release of personal information about the loan and the property for the buyer or escrow agency.
Lender will review the settlement statement indicating: sale price, loan balance, expenses, commissions and fees associated with closing the sale.
Seller must complete a 'hardship letter' explaining the reason for wanting a short sale. The letter should include all information regarding the financial circumstances of the seller along with bank statements, investment account information, pay stubs and other necessary financial information.
The lender will connect with the broker to provide a price opinion based on the condition of the home, market value, maintenance costs, etc.
The lender reviews the purchase agreement and real estate commissions and weighs them against the cost of repossessing the home to sell or auction.
If the lender finds the situation works in their favor, the short sale will proceed with the terms negotiated in the purchase and sale agreement.

Short Sale Mistakes to Avoid:

Don't low-ball your offer. Lenders are trying to minimize loss and have a good sense of property values so make your offer as tempting as you can while staying inside your profit guidelines.
Have a knowledgeable short sales professional on your side. Lenders are busy and do not have time to explain the process so make sure you know what you are doing, or find someone (like a real estate attorney or a broker with short sale experience) who does.
Don't assume each lenders short sale process is the same. Each lender has different documents, requirements and regulations so don't foul up by making assumptions.
The fewer loans on the property - the smoother the short sale process. Avoid complicating an already complex process by having a good handle on what's owed on the home.

Why Short Sale Knowledge is Important for Brokers and Real Estate Agents

You can recognize the opportunity to sell a home and receive commission on a home that would otherwise be repossessed by the lender or auctioned.
To develop a favorable reputation among potential buyers (who stand to purchase a discounted home with a short sale) and among sellers (who will no longer go into foreclosure or declare bankruptcy) let the experienced short sale lawyers at Gosselin Law guide you through the MA short sale procedure. Very often the legal fees are negotiated with your lender as part of the short sale procedure. Gosselin Law's short sale group can be reached at 781-782-6000 or toll free at 877-325-6746. Gosselin Law has convenient office locations in Boston and throughout Massachusetts.

Drama in Real Life: Foreclosure!

jgosselin@gosselinlaw.com (John Gosselin) — Thu, 02 Oct 2008 13:58:52 -0500

This article, from GetRichSlowly.org does a great job at demonstrating how the current economy is affecting the average person.

Drama in Real Life: Foreclosure!

By: J.D. Roth of GetRichSlowly.org

Most of the time, the talk about the housing bubble and the credit crisis and the faltering U.S. economy seem rather abstract to me, as if people were discussing a problem in Canada or Mexico. Or Norway. I've spent the past four years focused on my own financial situation, ignoring the outside world. The national economy often seems remote from my own personal economy.

But there are millions of average people who have been affected by this country's fiscal woes. My little brother, Tony, is one of those average people. He's in dire financial straits.

In 2004, Tony bought a house in Portland for $415,000. In 2006, he got a new job in central Oregon, so he moved his family to Bend. He put the Portland house on the market. He intended to rent a place in Bend until his existing home sold, but they he found a house he liked. He applied for a loan and was approved. He bought the house.

The house in Portland never sold.

For the past two years, Tony has been making $5200 in mortgage payments every month. Or, lately, not making the payments. He ran out of money long ago. Tony agreed to let me interview him yesterday in order to share his story with other GRS readers.

Note: Tony knows he made some poor choices, and he blames himself for his current problems. He's candid that he should have been paying more attention to his finances. But, looking back to 2006, he doesn't understand why the bank approved him for the mortgage on the Bend house before the one in Portland sold. It seems like the bank was betting on that sale, too.

J.D.: How are things going?

Tony: What do you mean? They're not going very well. The house in Bend was foreclosed on yesterday. The one in Portland is for sale again.

J.D.: You weren't able to sell the house over there, huh?

Tony: No, plus we consulted with a lawyer, and he said we should just give it back because of the tax ramifications.

J.D.: I don't understand.

Tony: Well, it would be a short sale. To give you an idea, we put the house up for sale at $299,000, and we paid $380,000 for it. So what you do is you do a short sale - the mortgage company has to agree to it - but the government considers the difference as money that was given to you. It's taxable income.

J.D.: When did you buy the house in Bend?

Tony: It cost $380,000 in September 2006.

J.D.: And how much was the mortgage?

Tony: Roughly $2400 a month. There were two mortgages.

J.D.: When the bank forecloses on it, what happens?

Tony: We've been out of the house for a while. We're living with my wife's parents. From what my lawyer says, there's nothing the bank can do to us. They'll essentially just take the house and then auction it off at the courthouse steps. There's no other ramifications to me. There are several houses that are being foreclosed on in our neighborhood. One that went to foreclosure and was auctioned off sold for $230,000.

J.D.: Was it the same kind of house that would have gone for $380,000 in 2006?

Tony: Yeah. It's the exact same house as ours except it has a two-car garage and ours was a three-care-garage.

J.D.: Holy cats. That's like a 40% drop in two year!

Tony: I know.

Note: In 2006, Bend has one of the hottest real-estate markets in the country. Now it's fallen on hard times. Again, most of Tony's problems come from that fact that he gambled by not selling his first house before buying a second one. Back then, this didn't seem like it would be a problem.

J.D.: You wouldn't have been in such a bad situation except you haven't been able to sell your Portland house, right?

Tony: Yes.

J.D.: And how much did you buy that house for?

Tony: We bought it for $415,000 at the end of 2004. We still owe the bank $367,000. We're paying $2800 a month.

J.D.: And you tried to put it on the market when you moved to Bend, right?

Tony: Well, on the advice of our Realtor, we put it on the market for $585,000, because that's what she said that it would go for.

J.D.: And that was in the summer of 2006?

Tony: Yes. Then after the house had been on the market for a month, we got an offer at $500,000.

J.D.: And you turned it down?

Tony: It was turned down but not by me. The Realtor got it as a verbal offer and said that she told them "no" because she could get more for it. She informed us that they had made a verbal offer a week after they made it. Then last September we almost had it sold at $480,000 but the deal fell through because it was based on whether or not the couple sold their house. Guess what didn't happen?

J.D.: And that's when you started renting the house. [For the past year, Tony has been renting the house to a friend, trying to defray some of the mortgage expense.] What do you have it on the market for now?

Tony: We have it on the market for $499,000. We just put it on the market last weekend, but we already have somebody interested in it.

J.D.: If that sells, does it get you our of your bind?

Tony: It helps, but it doesn't necessarily get us out of the bind. Some of that money would go to the Realtor. Plus we owe money to other people. [Tony borrowed money from various family members.] And then there are our normal bills, which are behind. So even if we sell, it doesn't solve the problem, but it does help.

Note: You know how the power of compound interest can help you save? Well, it works in reverse too. People in credit care debt understand that. Tony's learning that the damage from mistakes can compound, too. What started as a small problem - needing to sell the Portland house - has mushroomed out of control. Things just keep getting worse...

J.D.: A couple of months ago, you mentioned that you're doing some sort of consumer credit counseling or something. How does that work?

Tony: Not very well. It's not a debt consolidation place, but it kind of is. These guys are for profit. They told me they settled a Bank of America account for me, but I keep getting letters from Bank of America saying the account is not settled. So this place drafts money out of my account every month to pay the people we owe - it's kind of like forced savings, in a sense - but I won't let them draft any more until they give me written proof that they've settled with Bank of America.

You know, this is my own fault for not paying attention to exactly what was going on. I want to repay everyone because it's my debt, but at the same time, it's so huge, I don't know how I'll ever do that.

J.D.: Why do you think you got in debt? Do you think it's because of the house? Or do you think it's other stuff?

Tony: There are several reasons that got us into debt. The first time we put the house on the market in Portland, we used credit cards to fix it up. We put a fence on it and that sort of stuff. The move here probably cost us $8,000. The idea was when the house sold, it would be be paid back right away. The house never sold. Then we got ourselves into a situation where we had double mortgages.

J.D.: Oh yeah. What was the mortgage on the Portland house?

Tony: $2800. You do the math there. So, we had double mortgages, and we're doing whatever we can to pay them both, praying that the house in Portland will sell. So we borrow from people. Slowly but surely, the amount we can beg, borrow, or steal keeps dwindling. I finally said, "This is not going to work. We've got to do something different."

J.D.: Were you having problems with debt before?

Tony: Before we moved from Portland? No. We were actually okay. We were financially okay. Did we have credit card debt? Yeah. Was it manageable? Yeah. Could we make all our monthly payments? Yes. Did we have extra spending money after we made our monthly payments? Yes. We weren't paying off our debt extremely fast, but we weren't building debt. You know what I mean?

J.D.: To me, you guys typify all the problems that are going on with the economy at large. You guys are the ones we know most being affected by it. Do you pay attention to the economic news at all?

Tony: Yeah - every day!

J.D.: What do you think about it?

Tony: I was just talking about this with my wife the other day. I don't know if it's because of what I've been going through or what, but my personal opinion is that we're not looking at a recession. We're looking at a depression.

J.D.: And what's going to happen for you guys if there is a depression?

Tony: To be honest with you, I have no clue. I'm scared.

My heart aches for my little brother. Obviously, Tony is not a "victim" - I don't think he'd claim to be - but he is one very real part of the ongoing credit crisis. To me, he's the average American. He wasn't pro-active. He was eager to have a new house, so he bought one before the old house sold. He didn't have anything in savings, so he took a risk by financing his move on credit. Now, along with many others, he's paying the price. I just hope he comes through this okay.

Courtesy of J.D. Roth of GetRichSlowly.org.

HR 3221 FHA Modernization Law - The Modernization of the Reverse Mortgage Profession

jgosselin@gosselinlaw.com (John Gosselin) — Sat, 06 Sep 2008 19:42:30 -0500

I am cautiously optimistic as I pore through the text of the new FHA Housing Modernization Law (HR 3221). The Reverse Mortgage industry is about to become a main stream financial services industry. HUD, Congress, President Bush and I say so. Regulation can be a good thing for a nascent industry, the public will see it as our comeuppance, state regulators will know that we are here to stay and because of the relative complexity of the regulation the mainstream mortgage industry should finally see us as highly trained, ethical and committed professionals. This new found regulation comes with an opportunity to take the lead from here to become a self-regulating industry. It is time to bring professional certification, reverse mortgage originator licensing and public relations outreach like we have never seen before. Now is the time. Seniors need to have hope for financial stability in a time of increasing inflation and abysmal real estate values. A reverse mortgage should be considered by seniors just as they consider selling real estate, taking out home equity line forward mortgages, moving in with adult children, sinking into retirement account principal, etc. This "varsity" consideration will come so long as we as an industry stay focused on our ultimate goal of legitimacy. HR 3221 is the beginning of our future. Let's work together now. No reason to be competitors - the market is bigger than the service providers currently in place to provide services. Join hands. Hang on tight. The ride just started! Law for Life is committed to serving our reverse mortgage industry clients in compliance matters, sales strategy, management consulting and title services on a national basis.

The Future of Reverse Mortgages

jgosselin@gosselinlaw.com (John Gosselin) — Sat, 06 Sep 2008 19:05:58 -0500

Reverse mortgages have a bright future. I know because the government is paying attention, there are more and more reverse mortgage regulations and the media has differentiated reverse mortgages from forward mortgages. In addition, there's merger and acquisition activity with major corporate players putting real money on the table - Guggenheim Partners, MetLife, Manulife are all names we see and hear day to day in the reverse mortgage industry.

For those of us that have been in and around reverses for 10, 15 or more years it's refreshing to be noticed as a discreet industry with a unique and important mission. As time progresses we will see a diversion of our industry completely from the mortgage loan industry. Our product will not be called a reverse mortgage in the next few years; there will be a new more refined and elegant offering. An example of this is Virgin Money's Retirement Mortgage that simplifies the financial arrangement of intra-family lending. I have been privileged to work with Virgin Money over the years to help decant their offerings. A new spin coming to the reverse mortgage industry is multiple party loans - a lender, a servicer, a borrower, a community organization, a family member or two, a private investor, et al.

Qualifying for Medicaid - A Massachusetts Guide to Medicaid Asset Protection Techniques

jgosselin@gosselinlaw.com (John Gosselin) — Sat, 06 Sep 2008 18:50:59 -0500

I admire Roto Rooter. Few other businesses are so financially successful using a single tool - such as the spiraling drain cleaning tool. As an elder law and Medicaid attorney in Massachusetts I am starting to feel like Roto Rooter. New Medicaid regulations and qualifications have made it nearly impossible at the time of nursing home admission to protect an elder's assets. Despite the strict guidelines and pre-planning requirements of the Deficit Reduction Act and interim state and federal regulation, we are still winning the battle of family asset protection. If you are facing the spectre of paying the outrageous costs of a Massachusetts nursing home from your own funds please call Law for Life for a free telephone consultation to review your Medicaid asset protection options. Our phone number is (toll free) 877-325-6746 or 781-782-6000. We have offices throughout Massachusetts (Boston, Hingham, Wellesley, Winchester and serve the Worcester, Springfield, New Bedford/Fall River, Barnstable and Pittsfield areas through satellite and in-home appointments.

Often our only tool in Massachusetts is the Medicaid Qualifying Immediate Annuity, also called Single Premium Immediate Annuity (or SPIA). Although pooled income trusts have their place, we are not convinced that they will be available much longer as an emergency planning tool. These annuities are quite simple, the Medicaid applicant or their community spouse contributes a lump of funds to an annuity account with an insurance company and the insurance company returns the money to the annuitant over a fixed period of time consistent with their life expectancy under the HCFA life expectancy tables. When the annuitant dies then either the family or the Commonwealth of Massachusetts Division of Medical Assistance gets the funds depending very specific rules.

But there are several other options for elders and their families facing long term care financing and Medicaid qualification. There are exception for the principal residence where the nursing home resident's spouse is still living in the home. Same with siblings, minor, blind or disabled children. The other major exception is for children who are caregivers for their parents (the "caregiver exemption") in the two years prior to the elder's nursing home admission.

From an estate planning perspective and for non-real estate assets, our choices are more limited. There is the Medicaid Annuity (for which Law for Life is recognized as a Massachusetts source for the design and implementation of annuity based plans), but also the use of Special Needs Trusts that can be establish without disqualification for anyone in the Medicaid applicant's family. Disqualification for Medicaid is the term used by the Massachusetts Division of Medical Assistance (MassHealth) to describe the time period for which a Medicaid applicant or nursing home patient is ineligible for Medicaid benefits.

Of course, advance estate planning can solve a lot of these Medicaid qualification issues. If an elder client has good health, is generally under 80 years of age and has the wherewithal to pay annual premiums then Long Term Care Insurance is a great option. Premiums can be costly on a cash basis, but I have never had an elder law client that went on claim with Long Term Care Insurance complain about the benefits. The benefits are generally cash payments for home care and nursing home care. Many people call Long Term Care Insurance "nursing home insurance", but it is really much more than that as it includes a home care benefit that can be even more important to elders in need of services.

With the same foresight as an insurance applicant, elder law clients at Law for Life are often advised when they are healthy (I like to say "when you are still buying green bananas") to set up irrevocable trusts that preserve the step-up in tax basis and remove the elder law client's assets from inclusion in their resource calculation by MassHealth. The "trick" is that after setting up and funding these types of Medicaid trusts, the elder cannot qualify (or apply) for Medicaid for five years. At one time the waiting period was much shorter on transfers and trusts, but now it is a uniform five years before the trust's Medicaid protections kick in.

That's about it for asset protection and Medicaid qualification. It is imperative to speak with a competent elder law attorney such as us experts at Law for Life (our phone number is 781-782-6000 or toll free at 877-325-6746) regarding your personal situation as the regulations are very complex and change often during the year. Whatever you do, do not apply for Medicaid without speaking with an elder law attorney, no matter how much the nursing home pushes you to sign papers or an application company, such as Medi-Services encourages you to 'just get it done' - keep your pen in your pocket until you speak with an elder law attorney.

Gosselin's New Job - Maybe it Should be 8 O'Clock Corp?

jgosselin@gosselinlaw.com (John Gosselin) — Sat, 06 Sep 2008 16:45:01 -0500

Attention Jon & Kate Plus 8 Fans! This Gosselin has a new occupation - apart from his professional activities, TV appearances, media events and the upcoming book - Master Coffee Purveyor.

After trying several different coffees, Gosselin discovered the best coffee in the world - Kona. Gosselin's new company, in conjunction with nationally recognized entrepreneur Joseph Hickson, is at www.EstateKona.com.

Estate Kona offers 100% Kona coffee grown on the best estates. All Law for Life blog readers will be entitled to a special "Jon & Kate Plus Eight" discount. Just enter "Jon&Kate10" for a full ten percent discount on all grades of kona coffee.

Aloha and Mahalo!

Reverse Mortgage Alphabet Soup - FHA; HECM; MIP; NRMLA; H.R. 1852

jgosselin@gosselinlaw.com (John Gosselin) — Fri, 05 Sep 2008 15:51:00 -0500

Reverse mortgages are statutory creatures. Reverse mortgages exist because the Congress says that they exist, and so, they are creatures of government standard abbreviations. Just like being at OCS to get your O-1 and then a rack in BOQ for USN-SWOS. For land-lubbering taxpayers, that's Officer Candidate School for Officer Grade 1 (Ensign) and housing in the Bachelor Officer Quarters at Surface Warfare Officer School in the US Navy.

Go HERE for an exhaustive listing of all the terms and features of FHA's (Federal Housing Administration) products and services.

But today's blog is about something far more exciting than abbreviations, although without them the short press release below from NRMLA on the FHA H.R. 1852 HECM modernization plan would be nearly incomprehensible. *********

NRMLA Anticipates Movement on FHA Modernization Bill

NRMLA is hopeful that the FHA modernization bill (H.R. 1852) will start moving in the next couple weeks and be voted on by the full House of Representatives after the July 4th recess.

Sponsored by Financial Services Committee Chairman Barney Frank (D-MA) and Rep. Maxine Waters (D-CA), the bill would: 1) Permanently eliminate the HECM loan cap; 2) Permit HECM for home purchase; 3) Allow HECMs on housing cooperatives; and 4) Require HUD to study the impact of reducing mortgage insurance premiums, and exempting borrowers from paying any MIP if all, or a portion, of the loan proceeds are used to purchase long-term care insurance.

In addition, H.R. 1852 would increase lending limits for all FHA programs, especially in high-cost areas, like California, New York and Massachusetts by raising FHA's maximum mortgage limits to 100 percent of an area's median home price.

Over the past couple weeks; NRMLA has been negotiating with other stakeholder groups to remove a provision that would lower origination fees on HECMs to no more than 2% of the "original principal limit of the mortgage." Stay tuned for further updates.

******** I like to say that we are at the beginning of the beginning for reverse mortgages. As much as reverse mortgages have been around for 40 years in a formal sense (and over 2,500 years in other forms - a short history of the world of reverses is coming soon), reverse mortgages are metaphorically hitting their next threshold in Moore's Law. Which is a nice way of saying that the market for reverse mortgages is growing at an exponential rate - and with all good growing businesses; it's ripe for more government regulation.

H.R. 1852 as set out above, starts to address the initial framework of reverse mortgages - a framework that served us well until now. Reading some of the dicta and side notes of the committees behind this legislation reveals that the government did not expect reverse mortgages to be so successful a product so fast. It makes you almost wonder whether there will be a rush to "irrational exuberance" over reverse mortgages. I don't believe that the market will ever become large enough to impact the overall economy too much, but it will be interesting to watch seniors taking responsibility for their own expenses from their own wealth and not relying on government programs or family members for their living expenses. A reverse mortgage is the ultimate libertarian gesture - I will take care of myself, thank you very much. This should be really popular in New Hampshire.

Looking in the crystal ball I think that you will see MIP (mortgage insurance premium) get rolled into the interest rate of the reverse mortgage loans and all but disappear. Despite NRMLA's obvious incentives in maintaining high loan origination fee caps, you will see a study and drastic reduction in the overall cost of originating reverse mortgages. I think that price competition, which has essentially destroyed the conventional forward mortgage business, will come into the reverse mortgage market. This price competition will at first cause the early entrants to lose market share and gross revenue and for new entrants to take business. Over time it is my opinion that the reverse mortgage lenders that embrace seniors, understand the good karma of reverse mortgages and only sell to those that truly need reverse mortgages will be rewarded with lasting market share. When banks take reverse mortgages as a product focus, especially Bank of America, we will see a transformation of the marketplace that will further and permanently reduce the costs (and therefore origination revenue) of reverse mortgages across the board.

Just so you all know I will be on vacation for the next couple of weeks, so please expect pretty light blogging. Happy 4th of July.

Sympathy is Hard to Find - Gosselin Job is Safe

jgosselin@gosselinlaw.com (John Gosselin) — Wed, 03 Sep 2008 06:47:45 -0500

By Sean P. Murphy

Globe Staff / August 29, 2008

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Soaring gas prices, job losses, and other components of New England's struggling economy have taken a bite out of slot machine revenues, resulting in the first significant, sustained dip in the region's gambling market since Connecticut opened its tribal casinos in the 1990s.

Slot machine players wagered 6.5 percent less at the two Connecticut casinos and two Rhode Island slot parlors in July, compared with July 2007, a decrease of $137 million.

The downturn, reflective of a national slide in gambling revenues, has taken hold even as New England gambling operators have increased the supply of slot machines. About 1,300 new machines were placed on line in Connecticut and Rhode Island in the last year. And today, Mohegan Sun in Connecticut is hosting the grand opening of a $925 million expansion, adding 650 machines.

Mitchell Etess, Mohegan Sun president and chief executive, said yesterday that the economic downturn "clearly is having a negative impact" on Mohegan Sun and Foxwoods, Connecticut's other casino. "But this is a very solid market and will turn around," he said.

For years, Foxwoods and Mohegan Sun and the Twin River and Newport Grand slot parlors in Rhode Island added more slot machines to keep up with increasing demand. But now the demand appears to be more than satisfied, at least temporarily.

What will happen in the future is difficult to predict, gambling analysts said. The divergent trends - more slot machines, less demand from gamblers - could complicate the debate over whether to legalize casinos in Massachusetts. Governor Deval Patrick proposed a plan to license three casinos in Massachusetts last year; it was defeated by the Legislature, but advocates and opponents expect that the issue to emerge again in 2009.

"It's got to give people pause, and surely it will give opponents to casinos in Massachusetts new arguments" about market saturation, said Arthur Wright, a University of Connecticut economist who has tracked the industry for years.

The economic downturn alone means that bids for Massachusetts gambling licenses, pegged by Patrick last year at a minimum $200 million each, would be substantially less, because of increased borrowing costs, Wright said. And it may well preclude some would-be bidders from getting into the game because they cannot line up financing, he said.

Kofi Jones, a spokeswoman for the Patrick administration, said it was premature to discuss future casino initiatives.

The one location that could be immune to market saturation in New England is in metropolitan Boston, however. With its high per-capita earnings, dense population, and huge tourist market, the Hub remains an attractive location for a new megacasino, he said.

Laura Everett - a spokeswoman for Casino Free Mass, a coalition of groups opposed to an expansion of legalized gambling - said a casino in or near Boston may succeed for the investors, but would do so at the expense of other businesses in the vicinity.

"Casinos suck up all the available discretionary spending in a area, and that means owners of restaurants and other small business need to be very concerned," she said.

Locating a casino in a urban area also ratchets up the social costs, especially for less affluent patrons who can least afford gambling losses, Everett said.

Wright's analysis of whether a saturation point is being reached indicates that locating casinos in areas of Massachusetts outside metropolitan Boston, including the proposed Mashpee Wampanoag casino in Middleborough, would involve more economic risk for developers.

But Scott Ferson, a spokesman for the tribe and the investors in the $1 billion Middleborough proposal, said the downturn raises no great concerns. Even though Middleborough is 40 miles from Boston, he said, "people in New England like casinos, and they have shown they're willing to drive to them by going to Connecticut all these years."

Nationally, the gambling picture is a little better than in New England, said the American Gaming Association, an industry lobby that tracks commercial casinos. Holly Thomsen, a spokeswoman for the organization, said gambling revenue in casinos was down 2 percent in the second quarter of 2008, compared to the previous year, in the 12 states where they are legal, excluding Indian-operated casinos.

Measuring by the full quarter, instead of just July, slot revenues at Foxwoods and Mohegan Sun declined by more than 4 percent.

Michael Pollock - managing director of the Spectrum Gaming Group, which recently completed a gambling study for the state - said the national downturn in the gambling industry is unprecedented. In the past, the industry managed to ride out business cycles, leading some to consider casinos to be recession-proof.

But the current slide is different, Pollock said. Today's turbulence is closely tied to a bust in the housing market. High housing prices fueled the kind of confidence and even exuberance that fills casino floors and sometimes financed casino spending through home equity loans, he said.

Moreover, the industry was a lot smaller in the last recessions and less dependent on casual or new gamblers. "This industry is in uncharted waters right now," Pollock said.

The downturn has been particular unforgiving at Twin River, where investors say they are on the verge of bankruptcy and are trying to negotiate a deal with the state to reduce the amount they pay to the state in taxes.

The investors, including some who put money into developing Mohegan Sun in the 1990s, took on $577 million in loans to buy the old Lincoln Park racetrack and refurbish it. They doubled the amount of "video lottery terminals," which operate similarly to slot machines, to 4,741, and have added 24-hour operations on weekends. While those moves have increased revenues, they have not been enough to cover the higher debt costs.

The owners - including Len Wolman and Sol Kerzner, the developers of the proposed Mashpee Wampanoag casino in Middleborough - have received a credit downgrade and are negotiating with lenders.

****** Jon Gosselin from Jon & Kate Plus 8 has no association with this website or this law firm, but we welcome all Massachusetts and New Hampshire visitors to enjoy our legal information.

Local Elder Law Attorney Speaks at National Conference, Often called upon as expert speaker

mbrickley@gosselinlaw.com (Melissa Brickley) — Mon, 25 Aug 2008 16:41:44 -0500

FOR IMMEDIATE RELEASE

Contact:

Melissa Brickley

Gosselin Law - Law For Life

Tel: (781) 782-6000

Fax: (781) 729-2204

mbrickley@gosselinlaw.com

www.LawForLife.com

Winchester, Massachusetts, August 25, 2008 - Attorney John T. Gosselin of Gosselin Law in Winchester, MA has been called upon as a featured speaker for the American Land Title Association (ALTA) for their October annual convention. Attorney Gosselin will be conducting a professional development session entitled 'Reverse Mortgages: Hot Market or Big Risk?' on Friday, October 17 at the convention in Koloa, Hawaii.

As an elder law lawyer and national expert on reverse mortgages, Attorney Gosselin is often called upon as a speaker at national events. The most recent of these events was a national teleconference for the National Reverse Mortgage Lenders Association (NRMLA) entitled 'The Impact of Reverse Mortgages on SSI and Medicaid.'

Gosselin Law, with offices throughout Massachusetts, is based in Winchester and focuses its practice on elder law, estate planning, probate, tax & trust administration and real estate.

If you'd like more information on this topic, or to schedule an interview with Attorney Gosselin, please call Melissa Brickley at (781) 729-0313 or e-mail Melissa at mbrickley@gosselinlaw.com.

Elder Brother Helps Pope 'Accept Weight' of Old Age

jgosselin@gosselinlaw.com (John Gosselin) — Sat, 23 Aug 2008 20:16:03 -0500

Once in a while it's nice to get a little perspective on things. I mean, we are all aging every day, but at some point you also need to take stock and look inward. This little news clip really got me, most especially the words "serenity, humility and courage." These are not merely idol words, but, at least to me, goals worth achieving. Take a minute. Take stock of your own life. Be serene. Be humble. Be courageous.

(From Associated Press)

VATICAN CITY - Pope Benedict XVI said he is living out his old age with courage, thanks to the help of his elder brother, Vatican Radio reported yesterday.

Benedict, 81, mused aloud about growing old at a ceremony Thursday to make his brother, Georg Ratzinger, an honorary citizen of Castel Gandolfo, the lakeside town near Rome that hosts the papal summer residence. Georg, a priest in Germany, is 84.

"We have reached the last stage of our life, old age," the pope said. "The days to live are progressively growing fewer. But even in this stage, my brother helps me to accept the weight of every day with serenity, humility and with courage."

The brothers recently vacationed together in the Italian Alps. Georg is a former choirmaster who is now nearly blind.

From the Boston Globe - Massachusetts State Reverse Mortgage Website

jgosselin@gosselinlaw.com (John Gosselin) — Fri, 15 Aug 2008 15:27:07 -0500

State launches reverse-mortgage website

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August 15, 2008 11:18 AM

The commonwealth of Massachusetts said today it has launched a new website to help educate older home owners about the pros and cons of reverse mortgages and the desirability of seeking financial counseling when considering one.

The website's address is www.mass.gov/reversemortgage, and according to state officials, such mortgages are increasingly popular among older residents looking to supplement a Social Security income.

"Reverse mortgages are loans that enable senior homeowners, typically 62 years and older, to convert the equity in their home into income," officials noted in a press release.

In a statement included with the release, Daniel C. Crane, undersecretary of consumer affairs and business regulation, said: “Reverse mortgages are extremely complicated products and consumers, beyond the required counseling, should make every effort to obtain independent legal and financial advice when considering one. It is important to appreciate the costs associated with these loans and that, over time, the loan will deplete the accumulated equity in your home.”
(By Chris Reidy, Globe staff)