The reverse mortgage is a product designed for the elderly (over 65 or disabled) to supplement their monthly income by using their home as collateral. While the bank pays money into the consumer’s account on a monthly basis, the home serves as collateral. Normally, it is the heirs who, when the mortgaged person dies, decide whether to pay the debt or not, thus losing ownership of the property. Can they claim over the sale of a reverse mortgage?
The truth is that there are already judgments that have ruled in favour of the heirs considering this financial product and/or the insurances attached to it null and void.
What is the cause for the rulings in favour of the heirs when claiming on the reverse mortgage? The abusive nature of some of the associated products such as annuity insurance, which can sometimes result in the nullity of the reverse mortgage itself and, consequently, of all subsequent acts.
Although it is true that the reverse mortgage is not a product that is now widely marketed by financial institutions, it is also true that it was offered by many institutions during the years 2007-2010.
Those years were turbulent for financial institutions and, as proof of this, there were numerous practices typical of that period that were later taken to court: floor clauses, IRPH, multi-currency mortgages, Banesto’s Tranquility mortgage, early maturity clauses, late payment interest and mortgage arrangement fees.
And since we have already mentioned the mortgage formalisation costs, it is worth mentioning that it is also possible to claim in the reverse mortgage for this abusive clause that includes that it is the consumer who must pay the agency, notary, registry and stamp duty costs.
Therefore, our advice is that, whether you are thinking of taking out a reverse mortgage or if you are one of the affected heirs, you should go to a specialised lawyer to have your case analysed.
At Bufete Salmerón we are leaders in banking, property, and inheritance law. Contact us on 954 536 038 or 695 694 847 and, within 24 hours, we will give you our legal assessment with no obligation whatsoever.
