Work continues on reverse mortgage legislation

2010-02-22

The Ministries of Finance and Justice are preparing a new statute on reverse mortgage loans. The bill is to be ready by the first half of 2010, according to PAP.
Reverse mortgages are a solution aimed at older people who own real estate or hold perpetual usufruct rights to property. The bank would pay the owner periodic cash installments or a single credit payment, which the owner would not have to pay back. He or she would remain the owner of the property for life, after which, on the basis of the credit contract concluded between the owner and the bank, ownership of the property will pass to the financial institution. And through the sale of that property the bank will be able to recover the cash it originally transferred to the owner. Currently, Poland has no legislative provisions allowing for the granting of reverse mortgages – in particular there are no mechanisms in place ensuring fast and effective satisfaction of bank's claims following the death of the owner of the mortgaged property.

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