First case of reverse mortgage loan; Rajamma lives in dignity
Palakkad: Rajamma (75), who is unable to walk due to a fractured pelvic bone, was abandoned by her daughter and daughters-in-law and has been living a dreadful life without food and water and defecating on her bed. However, Rajamma, a native of Elappulli, has become part of a historic act passed in 2007 for the welfare of senior citizens of the country.
After knowing the pathetic condition of Rajamma, accepting her property as security, Canara bank has given her money under Reverse Mortgage Loan upon the order by Palakkad RDO. The action was taken after her daughter and daughters-in-law disagreed to look after her.
According to Maintenance and Welfare of Parents and Senior Citizens Act, 2007, if the heirs have to get the property after her death, they have to repay the loan to the bank. If not, the bank can seize the property and deduct the debt amount. Rajamma can live with the reverse mortgage amount. This is the first case of reverse mortgage in the state Under the Maintenance and Welfare of Parents and Senior Citizens Act, 2007.
Rajamma's condition was informed to authorities by Child Welfare Scheme officer Latha Kumari and Anganwadi worker Rajeswari. Following that, she was shifted to Shanthal Sadan, Mundoor. Later when the case came before the RTO Kaverikutty, relatives of Rajamma denounced her. Following that, RTO ordered Canara Bank, the leading bank in Palakkad, to take her property as mortgage and lend reverse mortgage loan to her.
Reverse Mortgage Loan
A reverse mortgage is a mortgage loan granted over a residential property, that gives the borrower to access the unencumbered value of the property. Such loans are promoted to older homeowners who do not require to pay monthly mortgage payments. In this system, bank also has ownership of the property. It is just opposite to home loans. In home loans, a payment has to be paid back to the bank, where as in reverse mortgage, bank gives the amount to borrower every month.
According to revenue authorities, applicants for reverse mortgage is rare because of three reasons. Unawareness, emotional attachment to property and strict conditions by banks.