any ideas for helping parents with mortgage

Hi all,

My husband and I find ourselves in something of an unusual situation, and I'm looking to see if there are any ideas we haven't thought of.

We're in our early 30s, with parents in their late 50s. His mom hasn't worked a full-time job for more than 30 years, and his dad finds himself recently unemployed after an early retirement and a couple of now-complete consulting businesses. His dad is looking for a job (and any suggestions on late-50s job hunting for specialized skills that could translate into basic management would be appreciated too), but they find themselves quickly (in the next couple of months) heading to mortgage and health insurance crises.

We are fairly comfortable, and have some resources that we could use to help them out, but we don't want to shoot ourselves in the foot either. We have a 3-year old son and are considering expanding our family, and want to make sure we're planning to retire right around 60. Here are some of the ideas we've tossed around:
- having them sell the house and move in with us for a few years (promptly rejected, as we live in another state)
- having them sell the house and move in with his sister and family for a few years (being considered, as they live in the same state)
- giving/loaning them money to help with expenses/mortgage payments until they can sell the house
- co-owning the house with them
- buying the house from them outright and renting to them
- buying the house from them, with his sister and her family, not much discussion about "renting" - not sure if the
- trying to work a deal where we could assume payments on their current mortgage and keep their existing equity

Are there other ideas we're not thinking of? Has anyone else found themselves in similar a situation? Any ideas on the healthcare portion? They are, I believe, paying into a program offered by their state, but it's somewhere in the range of $7500 every 6 months.

If we take one of the options listed above, what considerations should we keep in mind - for instance, should we have documentation drawn up that says that if we loan them money to make the mortgage payments that we would recover the loan out of the initial proceeds from the sale of the house?

They intend for this to be the last house they live in / buy, so some of this could have estate implications, but likely far down the road - 20 years or more - too.

Thoughts? Suggestions?

Thanks,
~L

My main thought is that it doesn't appear that you have given a moment's thought as to whether you are really helping them out, or merely enabling their prideful behavior.

Ooh, that hurts -- "prideful behavior". But let's see.....you've got a 50-ish man who took early retirement without considering whether or not he could truly afford it, and who now finds anything less than a job using his "specialized skills that could translate into basic management " ....let me guess the word....insulting? The ugly truth is that 50-ish men who need work and who are facing imminent foreclosure do ANYTHING IT TAKES to take care of their families and their obligations.

Ditto 50-ish women. So she hasn't been in the workforce for 30 years? -- she's not eligible to work at Walmart, or Burger King? -- or will her pride not let her?

One or both of your parents should be retraining in a new career, especially if they are unwilling to give up their concept of who they are as people (a certain lifestyle, a certain kind of job, etc). As they discovered, 50 is too young to retire -- or at least it was too young for THEM to retire). One or both of them need to return to the workforce, full time, until such time as their finances allow them to afford retirement again. A job with healthcare benefits seems to be the thing they need. With his skills and experience, has he considered government work? -- in some governments, you need only work as little as 6 years to be vested in the pension plan!

You need to figure out whether your helping them out is merely a band-aid on a larger problem, or not. If all it takes is a couple of months of your covering the mortgage for them to get back on their feet, that's one thing. But you make it sound like they have a serious endemic problem -- that mainly they just cannot afford their retirement. The answer, then, is simple -- they need to go back to work -- and if it's a matter of losing their home, ANY job will do. Walmart greeter. Burger flipper. Stock boy. Entry level bank teller. Mall security. ANY.THING.

Yes, the bank can start foreclosure proceedings if payments have not been made. When your son died, his estate inherited his responsibility to keep up the payments on the house. If he didn't have any liquid assets that could be used for the upkeep, then someone should have stepped in and made payments or the estate should have put the house up for sale as quickly as possibly to avoid exactly this type of situation.

It doesn't sound like probate has really been opened on his estate; if it had and the bank was properly notified, it might have been willing to work with you. Even at this point, someone can step in and put the house up for sale on behalf of the estate to see if that provides a better outcome than letting the bank take the house.

I'm not sure why you think that the father needs to cooperate. Any family member could step in, be appointed as administrator, do whatever is necessary to settle the estate, and then provide the father with whatever funds to which he might be entitled.