Estate of Jones v. Live Well Financial, Inc.

Caldwell Jones obtained a reverse mortgage on his home. The lender loaned Caldwell money, with Caldwell’s house serving as security. No repayments were due during Caldwell’s life, but full repayment was immediately due when Caldwell died and the property was no longer the principal residence of at least one surviving borrower. Although Caldwell was married, Caldwell was listed as the only borrower because his wife, Vanessa Jones (plaintiff), was not yet 62, the minimum age to qualify for a reverse mortgage. Shortly after the reverse mortgage was executed, the original lender assigned it to Live Well Financial, Inc. (Live Well) (defendant). Caldwell died less than a year later. Live Well demanded immediate repayment of the loan balance. When payment was not received, Live Well initiated foreclosure proceedings against the home where Vanessa and a minor daughter still lived. On behalf of herself and Caldwell’s estate (plaintiff), Vanessa sued Live Well, seeking an injunction halting foreclosure. Vanessa relied on a federal statute that prohibited the Department of Housing and Urban Development (HUD) from insuring a reverse mortgage unless the mortgage deferred repayment until both the borrower and the borrower’s spouse died or sold the mortgaged property. She claimed the statute prevented Live Well from foreclosing on the mortgaged home while she was still alive and living there. The district court disagreed, concluding that although the statute limited HUD’s authority to insure a reverse mortgage, it did not impose any restrictions on lenders’ private contract rights. The district court therefore granted Live Well’s motion to dismiss Vanessa’s claim. Vanessa appealed.