"Andre-Francois Raffray thought he had a great deal 30 years ago: He would pay a 90-year-old woman 2,500 francs (about $500) a month until she died, then move into her grand apartment in a town Vincent van Gogh once roamed.
But this Christmas, Mr. Raffray died at age 77, having laid out the equivalent of more than $184,000 for an apartment he never got to live in.
On the same day, Jeanne Calment, now listed in the Guinness Book of Records as the world's oldest person at 120, dined on foie gras, duck thighs, cheese and chocolate cake at her nursing home near the sought-after apartment in Arles, northwest of Marseilles in the south of France."
I fail to see anything immoral here.
That's, again, the contract. Seems some people can't tell between legal and moral, unless we talk about the 70s and segregation or something like that...
The guy purchased the right to the house once the current owner dies, but you believe it's immoral for her to continue living in it, or renting it out, or loaning it to friends, while she is alive. I think it's immoral to demand the house while she's alive, since that wasn't the deal.
Sometimes legality and morality are widely separated, but here they seem related.
On the other hand, having someone pay tons of money and then die without anything to show for it, I do see, even if he "willingly signed into it".
There's also a threshold over which it should just be handed over. That such a threshold wasn't in the contract doesn't make it any less odious.
Also, I expect people buying such rights are generally well-off, and the people selling it to be relatively poor. After all, the buyer must be able to pay money on a house they cannot live in for an indeterminate period, and the seller typically chooses this construct to be ensured of both a roof over their head and money to live from for one's entire life, no matter how long that is.
The odds in this lottery get better every month for the buyer, so, assuming that the buyer can afford to buy into this, they should have no reason to want to get out of this.
That way, even in a case where there is disagreement in the family later on, parents can't be forced out of the house.
It can be a great solution for an old homeowner with meager retirement earnings and no natural beneficiaries.
Even people with motive.
I don't think it's a likely occurrence
It's a great deal if you can get it. The only time this will get problematic is if housing prices drop and continue to drop.
It's a no-lose proposition for the bank, presuming they charge a profitable interest rate. But, they are not guaranteed to get the house at the end of the deal.
>Reverse mortgages allow elders to access the home equity they have built up in their homes now, and defer payment of the loan until they die, sell, or move out of the home. Because there are no required mortgage payments on a reverse mortgage, the interest is added to the loan balance each month. The rising loan balance can eventually grow to exceed the value of the home, particularly in times of declining home values or if the borrower continues to live in the home for many years. However, the borrower (or the borrower’s estate) is generally not required to repay any additional loan balance in excess of the value of the home
Here is one: http://streeteasy.com/building/243-west-98-street-new_york/7...
these days, it is better to just move into a smaller flat and rent out the larger property at market rates.
The fun part is you aren't allowed to ask explicitly how healthy the owner is, so it's a total gamble. You might be stuck paying rent to someone who lives until they're 100 or they could die in an "accident" tomorrow. So in addition to checking the walls for damp when you go round, buyers surreptitiously look for medication and disability aids. Presumably some people also go to the trouble of stalking the current owners to gauge how close they are to the coffin.
To make things more exciting, if your parents bought a house en viager and they leave it to you in their will (but the owner hasn't died yet), you're on the hook for the payments. If you don't keep them up, the owner can re-sell the house.
http://www.connexionfrance.com/explaining-the-viager-system-...