It was pure insanity of the bank to give such a huge loan out ten years before retirement in the first place. That said, if the couple offered to pay €300,000 now, where is that money coming from and if they had it in the bank, why didn't they pay their mortgage with it? I am afraid they will receive zero sympathy from any quarters, it's not that they are going to be left penniless.
In fact I wouldn't be the least bit surprised if they suddenly come up with the extra 100,000 so they can keep this million euro home. I expect their legal fees to be huge also.