If the couple has been making their payments diligently for 27 years, first off I think the bank would be willing to negotiate. A foreclosure is not a good solution for anyone.
Also, keep in mind that you are talking about 8% of the original loan amount. Let's say the house went for $150,000 (nominal) when the couple bought it 27 years ago. That'd probably be on the high side, and of course the current market value of the house is irrelevant for this calculation. It would leave them with a $12,000 debt load at present. Even a reasonably high-interest (but not credit card) loan for that amount is most certainly bearable in terms of interest costs even on a limited income; a 10% interest rate would incur a cost of $100/month before tax effects. A payment plan to pay that loan off in five years brings the initial grand total up to the neighborhood of $300/month.
As has been pointed out, the bank can only take what is owed to them, but of course if the only additional equity the couple can provide is locked up in the house, selling the house is going to become necessary to enable access to that equity. In some jurisdictions (I don't know about the US, but Sweden has such provisions), debt collection is specifically called out to be made in as non-invasive a way as possible. Yes, the bank can force a foreclosure on the house, or for that matter any other asset which is collateral for a loan, but if there are other assets which can be used to cover the debt and will be less invasive to the couple's life, those are taken first. And it's rare that one has no assets other than the house, particularly at age 50+.
If the bank still demands payment in full to avoid foreclosure, especially with such a relatively small amount outstanding, it might not be unreasonable to ask around for a personal loan from family or friends. Use it to pay off the loan to the bank (or even maintain payments), then pay it back to whoever loaned them the money as quickly as possible.