Given the close ties between reverse mortgage fraud and elder abuse, it is unsurprising that the NRMLA Annual Conference in San Diego last month featured a session on “Spotting Elder Financial Abuse—And What You Should Do About It.”
While there are many different types of fraud and elder abuse, the panel was interesting—especially in the fact that it managed not to repeat too much information from the NRMLA regional conferences and from the session on elder abuse at the Mortgage Bankers Association (MBA) Reverse Mortgage Conference. The gist of the session was fairly new.
One large fraud topic is identity fraud, which had been covered extensively at the MBA Reverse Mortgage Conference. However, it was still interesting to learn that of the 8.1 million identity theft victims in the US, 9-10% are elderly.
The biggest question raised by the session was that of mental capacity and undue influence. As the panelists pointed out, there have been many high profile cases in the news recently with wealthy heiresses arguably being taken advantage of by younger men. As they pointed out, there are more agreements on some kinds of mental capacity than others. Wills, for example, are generally well understood. Other issues though, beyond just the capacity to alter a will, include allegations of “brainwashing” and “mind control.” Since reverse mortgage loan officers and counselors talk with and often meet the senior, they are in a position to spot problems more than others.
The panel highlighted four key questions reverse mortgage loan officers should consider in determining whether the reverse mortgage will be used as a tool of elder abuse or fraud.
- Does the senior understand what a reverse mortgage is?
- What is the money being used for? /Who’s going to benefit?
- Is someone threatening the senior to get the mortgage?
- Is this really in the senior’s best interest or is there something that can be done another way?
If a reverse mortgage loan officer, housing counselor or anyone else suspects an instance of elder abuse, he/she can anonymously and confidentially report it to Adult Protective Services. Elder abuse and fraud are unfortunately problems associated tangentially with the reverse mortgage industry, and it is important for those within it to keep an eye out and try to keep the bad from happening.
Write to Reva Minkoff