Example 1: Illustrates the development of equity value of the foreclosed property
An SSI recipient submits a March 31st demand letter. The letter states the recipient must pay all past due mortgage payments
by April 20th, otherwise foreclosure by power of sale will start.
We make all resource determinations as of the first moment of a calendar month. In
this case, the real property met all of the criteria of a resource as of March 1st
and April 1st. The field office (FO) determines the real property is a resource for
the months of March and April. The FO evaluates whether a resource exclusion applies
for those months.
The real property serves as the recipient’s principal place of residence. The FO determines
that the real property, regardless of value, is an excluded resource for March and
April because it meets the definition of a home.
The FO re-contacts the recipient after April 20th to determine whether foreclosure
proceedings have started and discovers that the recipient moved out of the home with
no intent to return on April 15th. Although foreclosure proceedings have started,
the FO evaluates whether the recipient can still legally sell the property and determines
that the real property continues to meet the definition of a resource as of the first
moment of May.
As of May 1st, the FO determines that the recipient’s real property is a countable
resource because it is no longer the principle place of residence and no exception
applies. The CMV is $145,000. The recipient owes the lender $160,000. The EV is $0
because the amount owed is more than the CMV. Since the EV of the real property is
$0, the property does not affect the recipient’s SSI eligibility.
IMPORTANT: Determine whether conditional benefits apply if the EV of non-home real property
would result in ineligibility. For more information on conditional benefits, see SI 01150.200.
Example 2: Illustrates development of undue hardship on a co-owner.
An SSI recipient defaulted on several mortgage payments. On February 2nd, the lender
initiated a judicial foreclosure in which a court must issue a final judgment. We
do not expect the court to issue final judgment of foreclosure for at least 3 months.
On February 28th, the recipient leaves the house without any intent to return. The
court issued a final judgment of foreclosure that transferred ownership of the real
property to the lender on May 11. The FO determines the real property was a resource
for the months of March through May.
The FO must evaluate whether a resource exclusion applies for those months. The recipient’s
brother, who is co-owner of the house, remained in the home until May 11. The FO determines
the house is an excluded resource because its sale would cause undue hardship, due
to loss of housing, to the co-owner.
The real property is not a resource as of the first moment of June. A foreclosed
home is not a recipient’s resource effective with the month after the month of transfer.
When there is a valid transfer, the recipient no longer owns the property. For provisions
of resource transfers see SI 01150.001B. The FO correctly assumes that the recipient received FMV when he or she transferred
of the title to the lender. This transfer does not assess a period of ineligibility
in foreclosure cases.