Reverse Mortgage Seen Skeptically

The Economic Freedom MP brought with it some measures to stimulate the economy, such as reverse mortgages.
 
It is an instrument that, quite simply, can be defined as the mechanism by which a financial institution (creditor) pays a certain amount over a certain period of time - in principle long term - to the owner of a property. (debtor).
 
At the end of the term, that means, after the last payment, the lender becomes the owner of the property, entitled to possession. Although the mechanism refers to the mortgage institute, it is closer to the chattel mortgage because, as in this and unlike that, the "loss" of property by the debtor occurs out of court, that is, does not depend on a lawsuit.
 
It is also intuitive that the debtor can repay the full amount received, of course plus interest. That is, the transfer of ownership to the lender must be one of two possibilities.
 
This new mechanism certainly seeks to facilitate and "cheapen" credit. This is because it would guarantee the lender to obtain the consideration immediately on the day following the termination of the contract. However, experience - based, for example, on the real estate fiduciary institute - teaches that the Brazilian culture of judicialization is always an obstacle to the rapid receipt of credit and, thus, frustrates the institute’s objective. One has to think, for example, that after the lender acquires the property, he will have to obtain ownership; if the debtor does not voluntarily surrender it, the issue will be judicialized.
 
One can also imagine the use of gimmicks - such as contractual review actions and allegations of violation of the Consumer Protection Code - by "professional debtors" to delay the performance of the contract to the fullest extent.
 
Imagine also that the property pledged as collateral is the debtor’s sole property and serves as his home. Often judges and courts are impressed by such a circumstance, little or nothing worth the fact that the debtor used all the credit and contracted with the lender willingly and willingly aware of what would happen at the end of the contract. Therefore, this new mechanism is to be regarded with some skepticism.

Rodrigo Pedrosa
Chiarottino e Nicoletti