The old lady made $1m in unearned value in her house. She can use a part of that value to pay taxes on the increase, live and die in the house, and her heirs still make free money.
Unless she resorts to a reverse mortgage, it's surprisingly difficult to refi when you have no earned income. I have over 1M equity in my house but can't access it while unemployed (according to lenders I've contacted, including credit unions with whom I have 30+-year ties.)
Let's say property taxes are 2%. She's got a $1M house so thats $20k per year for the rest of her life. Is it really that hard to borrow $200k against a $1M house?
And then die me not pay back loans? Or what if there is a market downturn and now the lenders are stuck holding it? Maybe they don’t lend I’m the first place?