Legal Question in Real Estate Law in California

You need to consult with an attorney who specializes in forensic mortgage audits and litigation with mortgage lenders. There are more firms than ever now doing this, so you may even be able to find someone with expertise in HECMs. The problem you have is that the cost of that type of litigation can be very burdensome. Without a thorough review of the disclosures given, the loan documents and other materials, it is impossible to say if there are grounds to pursue judicial recourse. You also need to understand that in obtaining a HECM, the borrowers had to go through a class in HECM lending, and the disclosures are much more substantial than those for a traditional loan, so it is very likely that the borrowers knew about these conditions, and unwittingly accepted them not considering the future consequences of having done so. Alternatively, the only other options are to sell (leaving the surviving spouse with nowhere to live) or refinance; and I assume that at age 72, the surviving spouse has no means of repaying a loan making refinance impossible.

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I agree with Mr. Gibbs, and I would add that a key element here may be exactly what the fact that "only one spouse is designated in the paperwork" might imply in legal consequence. The Family Code requires that a transfer of an interest or an encumbrance of community real property must be signed by both spouses, or is void if the transferee or lender had actual or constructive knowledge of the marital relationship. Note: I don't practice family law and am quoting the statute from memory, so take it as a suggestion for further research and not an expert's pronouncement that the lender has no rights. However, it certainly may be an opening.