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.
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