Foreclosure and Medicaid

[Rich Hupper]

The subject of medicaid and real estate continues to elude me. I have yet come across another deal where the decision maker is in the nursing home and someone wants to buy her house. 

To complicate the matter, her house is encumbered by an old 2007 mortgage. The original principal balance was 201k. which means even if she never paid any of it there is at least 100k worth of equity. The 2007 mortgagee is currently foreclosing however I have not found an auction date yet in any news paper. 

I have checked the property's title and do not see any liens recorded for the owners nursing home expenses. However several attorneys have told me that these liens are phantom liens which are senior to a mortgage. 

In this instance we have 4 parties involved. The state, the mortgagee, the buyer and the owner.  Can anyone educate me on the process I need to guide my buyer down to acquire this property? Is there even a way to do it? 

Many thanks.