Lifetime loans or “reverse mortgages” in Spain explained

Lawyer Raymundo Larraín Nesbitt explains the pros and cons of lifetime loans, also known as “reverse mortgages”, as they exist in Spain.

Lifetime Loans, despite being relatively well-known and accepted in Anglosaxon countries for decades, are only just getting started in Spain. Back in 2006, acting on behalf of a foreign Lender, I was one of the first lawyers to formally introduce them.

It wasn’t until the fall of the following year, with the amendment brought about by Law 41/2007 to the all important Mortgage Act of 1981, in which for the first time a Spanish Law ruled on this “new” financial service. Even so, it brushed on it ever so lightly, almost in a shy fleeting manner, in its Additional Dispositions. Reserving the brunt of the regulation for future legislation. Here’s hoping.

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