Elder Abuse Awareness Day Spotlights Reverse Mortgage Consumer Protections

One in 10 seniors have been a victim of fraud or abuse, and only a fraction of those have been reported, the National Center on Elder Abuse, shared in a webinar today hosted by the National Reverse Mortgage Lender Association in honor of elder abuse awareness day.

Becoming aware of the signs and how to protect clients from financial elder abuse is vital to success in the reverse mortgage industry, where many professionals are working with older Americans.

“Of all complaints to the Consumer Financial Protection Bureau, 23% are about mortgage related products,” says Lorraine Geraci, VP of learning and development at Finance of America Reverse.

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Preventing and catching financial elder abuse should be a group effort from everyone who has ever worked with older adults. When it comes to Home Equity Conversion Mortgages (HECM), certain safeguards were put in place in past years, to not only make the HECM product stronger, but to keep the client safer against people who may be trying to take advantage of them, Geraci explains.

Some of these safeguards include: the mandatory third party counseling, mortgage insurance that’s incorporated into the HECM product and the equity limit. In recent years, additional consumer protections have also been developed through the implementation of the Financial Assessment and non-borrowing spouse policy updates.

While it’s easy to assume that a senior’s family would have his/her best interests in mind, the reality is 57.9% of the people who take advantage of older adults’ finances are family members, according to the National Center on Elder Abuse.

When working with clients, it’s beneficial to keep an eye on the relationship between the borrower and their family members, and if anything seems off, report it to Adult Protective Services, Geraci said.

Giving less than honest advice to a client or potential client in the reverse mortgage setting can also be a facet of elder abuse.

“In any kind of counseling materials, counselors should advise clients to contact someone on the list of lenders and go with whomever they are most comfortable with,” Geraci says.

Written by Alana Stramowski

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  • I would think everyone of us agrees with what Alana has pointed out in this article. There is not enough we can do in our industry to be on the lookout for anyone trying to perpetrate fraud on our seniors!

    We can do a lot to help as well, which goes beyond what the article states. We speak to seniors everyday and if most of you are like me, we have pretty lengthily conversations with them. We find out a lot about our seniors as well as some not very nice experiences they may have had.

    We all know that many seniors do not just talk to one company about taken out a HECM. During our conversations, if we find out some other LO from another company has given the senior information that could be of a fraudulent nature or that they may be trying to steer the funds the senior would get from their HECM into something that would be risky or to benefit the LO in some way, we need to take action!

    We need to find out who this LO and company is and report them to the proper governing agency. If we don’t do our part and report anyone that we find out is trying to defraud our seniors, than we are just as much of the problem as the perpetrator was and is!!!

    This in itself could take these type of people off the streets so they could not harm other senior citizens!

    John A. Smaldone
    http://www.hanover-financial.com

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