Reverse mortgage in respect of joint family property

In The Hindu dated January 28, you have justified State Bank of India’s refusal to accept joint family property for purpose of reverse mortgage. Since a karta or for that matter any member can even make a Will of his share in the property, there is no risk in accepting joint family property, if the loan on reverse mortgage is limited to mortgagor’s share in the property.

It is true that a person can make a Will for his share of the joint family property so that such share can be mortgaged by any member.

But one is unlikely to find a lender against such security in view of the varying interest for a member of the family, including the karta in the joint family property, in view of such share being reduced by any possible addition or reduction in the family during his lifetime.

Further, no lender may be expected to finance a borrower, where he has some interest in a joint or co-owned property, unless all the other persons interested in the property become co-mortgagors for the reason, it is not easy to market such partial interest.

Reverse mortgage itself is possible only for individuals.

One may not expect joint family property being accepted in such cases. If the other members of the family surrender their interest in a family partition, in favour of the person in need of reverse mortgage loan, it may be possible to persuade the bank to accept the same in a reverse mortgage and not otherwise.

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