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Borrower Member Loan 487590 | Lending Club Prospectus

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Amount Requested
$10,500
Loan Purpose Other
Loan Grade A4
Interest Rate 7.51%
Loan Length 3 years (36 payments)
Monthly Payment $326.65 / month
Funding Received $0 (0.00% funded)
Investors 100 people funded this loan
Loan Status Removed
Loan Submitted on 2/20/10 11:07 AM

Borrower Profile

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Loan Description

Borrower added on 02/20/10 > I will use these funds to purchase an oil/gas mineral lease from a family member who is forced to sell in order to qualify for medicare. The total purchase price is $19660. The remaining balance will come from my personal savings. I will receive a royalty check monthly (over $3600. in royalties paid last year)
Borrower added on 02/20/10 > Funds will be used to purchase an oil/gas lease from my grandmother who has to sell in order to qualify for medicaid. Purchase price is $19660. (appraisal value). I will use personal savings for the remainder. This lease is an active producer and royalties are paid monthly. The royalty amount for 2009 was over $3600. My gross household income for 2009 was $102000.
Borrower added on 02/21/10 > Correction - "Medicaid" not "Medicare"
   

Questions & Answers

Q: RE: $10,500 loan: You said quote... "in order to qualify for MEDICARE"...end quote. Only qualification criteria to qualify for medicare program is age 65 or older and/or Social Security Disability Income receipt status. What you meant to say was ... "to qualify for MEDICAID"... . Medicaid program imposes $$ earnings and $$ assets limits on eligible recipients. Mediciad recipients must either "spend-down" or literally dispose of $$ assets or $$ income producing assets in order to qualify for MEDICAID assistance. Been there, done that, with one of my own family members. Member 505570 USMC-Retired-Investor 02.21.2010 @ 07:20 AM ET
A: (02/21/2010-05:58) - My mistake. Yes, I meant "Medicaid". Without long term care insurance, a nursing home can deplete one's assets in a short amount of time!

Q: Hello. I have a few questions. Your reference is to medicaid, not medicare. If your family member sells the lease, they still are forced to use the money received ($19660) before they qualify for medicaid to pay anything. So, how are you getting around this? The one way that she might get around this is to gift the lease to you. Are you able to pay off your credit cards fully each month? Suppose that the mineral lease slows production during the first year. Will you still pay back on this loan even though you may be absorbing a loss? Wishing you the best.
A: (02/21/2010-07:20) - Yes, I meant to say "Medicaid", not "Medicare". Yes. my family member will use the funds to pay for nursing home care and when they are depleted, she will qualify to receive Medicaid. I am not getting around this. I am adding funds from my personal savings to the amount borrowed to equal 19,660. Medicaid forces the sell of this asset at appraised value, no less. She cannot "gift" these mineral rights to anyone and qualify for Medicaid. Yes, I am able to pay off credit cards in full each month. If and when the lease slows production during the payback of this loan, I will not have any problems meeting my obligations. I feel fortunate being given the opportunity to purchase this asset as the owner has been solicited many times in the past to sell. The offers continue to be received every few months. I currently have around 100k in retirement savings. I felt it would be wiser to borrow than to face the penalties and taxes if taken from my IRA.

Q: Am I understanding correctly that the goal is to reduce your grandmother's income to below the poverty level by transferring the assets so that she will be eligible for Medicaid? Is the price you are paying for the assets at or above fair market value? Thank you in advance for your answers.
A: (02/21/2010-08:02) - My grandmother was denied Medicaid due to the fact she owns mineral rights on 184 acres. The county tax appraisal on this asset is $19660. It is the need for Medicaid that is forcing her to sell these rights. She cannot sell for less than the county tax appraised value. The funds from the sale of this mineral lease will go to the monthly fee she is charged by the nursing home. Once that money is gone, she will qualify for Medicaid. I would consider this amount fair market value as many offers have been received over the years for this amount and more. She went into a nursing home about two years ago and her money has ran out. This situation highlights the importance of long term care insurance. Thanks.

Q: Not a question, just a comment: I agree with you about the importance of long term care insurance. I was asking about the fair market value because from what I understand if the transfer of assets is for less than the fair market value, there is a financial penalty imposed and also may be a time-delay imposed. I don't know how the "fair market value" is defined or determined as related to Medicaid. I do *not* know all the facts. I do hope that you consult an attorney or someone with authorative knowledge in this area, so you are sure to comply with whatever requirements there are.
A: (02/21/2010-09:09) - I have already talked with my attorney. That is where I gained most of my information. Medicaid considers the "fair market value" the amount assigned by the taxing appraisal office. A Medicaid representative has already informed us of the need for her to sell this asset at a minimum of $19660 for her to qualify for benefits.

Q: Thank you for answering all my questions. You gave outstanding answers demonstrating that you fully understand the situation. That adds significantly to my trust in investing in your loan request. Wishing you and your grandmother the best.
A: (02/21/2010-16:11) - Thank you.

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