From what I understand about Equity Release, its just another word for mortgage. With some lenders you don't pay a penny back, when you die, they get their loan, plus interest back from the sale of the property. With other lenders, you make repayments back to them, just like a mortgage but with a higher interest rate.(posted 8271 days ago)Ask your mother-in-law for the paperwork regarding the loan, or get copies from the lender. The contract should mention what would happen if the loan reached a certain level.
I don't know if there have been problems with equity release programmes but you may find further information at your local CAB or if you can afford to, see a solicitor. Even an Independent Financial Adviser might be able to explain the detail and maybe a solution to your mother-in-law's problem.