Reverse mortgages appeal to many retirees in the Sunshine State, as it is a method of converting part of the home equity into cash without having to repay it in monthly installments. These types of loans require that the borrower be at least 62 years old and that the property is the borrower’s permanent residence. When the borrower is married, both spouses are typically considered as borrowers, providing certain protections to the surviving borrower in the event that one passes away. One of the more prevalent protections is that the lender may not foreclose on the property while the surviving borrower continues to reside on the property, as long as the rest of the loan conditions are being met.
Recently, the case of Smith v. Reverse Mortgage Solutions, Inc. brought into question whether a non-signing surviving spouse has all the same protections of a “borrower.” In this case, Mr. Smith and his wife signed the mortgage, but only Mr. Smith signed the promissory note. Upon Mr. Smith’s passing away, the lender filed foreclosure, claiming that the surviving spouse was not a true “borrower” because she failed to sign the promissory note.
While the trial court sided with the lender, the Florida Court of Appeals saw things a bit differently. Upon reviewing all the documents, it was evident that the latter half of the mortgage referred to both Mr. and Mrs. Smith as the “borrower,” and that both spouses had signed the mortgage, which was verified by two witnesses and a notary. The Court of Appeals also based its reversal on the Florida’s constitutional homestead exemption. Under the homestead exemption, a security interest is only legally binding if signed by both the owner of property and his spouse.
This is a prime example of how seemingly small errors relating to mortgages may have serious consequences. If you are embroiled in a reverse mortgage case, you need an experienced Miami foreclosure attorney to help you navigate the intricate aspects of foreclosure law. Graham Legal invites you to schedule an initial consultation to speak with one of our expert attorneys today. If you want to take the best steps possible and begin the path to a more financially stable life, Graham Legal would love to help.