Sadly, many scams target the elderly who are stripped of their dignity and swindled out of their homes and life savings. Financial elderly abuse is more complicated than ever and the scam artists are getting more creative.
A man we’ll call Darryl wanted to purchase a home that had been foreclosed on. Darryl wasn’t able to get a mortgage due to some previous credit problems so he enlisted the help of a partner who could. The partner acted as the “straw buyer” who was able to secure a loan for the home.
This might be the end to the story except Darryl and the straw buyer found a vulnerable elderly gentleman we’ll call George. George, believing he was the benefactor of a wonderful act of kindness, was allowed to live in Darryl’s new home for a very low monthly payment. Darryl even deeded the home to George.
After 60 days, Darryl and the straw buyer initiated a Home Equity Conversion Mortgage (HECM) also known as a reverse mortgage to “help George”. A homeowner has to be 62 years old or older to secure a HECM. The straw buyer worked with a crooked mortgage appraiser who falsely inflated the appraisal.
Darryl told George to request a “lump sum disbursement of the equity” from the reverse mortgage. George had no idea this meant he would receive a cash back check. When the check was issued, Darryl and the straw buyer endorsed it and quickly disappeared with over $150,000.
A year later, George, was unable to pay his property taxes and eventually foreclosed on and evicted. Homeless, he still doesn’t understand what happened to him.
In an all too common story, a father-daughter team presented themselves to a grieving widow as members of the clergy. They urged and convinced a widow to sell her home in order to bury her husband. This father-daughter team included a brother who was a real estate broker. During the course of the sale, the “team” falsified debt notes and gave the widow just enough cash to bury her husband. Under the guise of helping the widow, the “team” took the remainder of the nearly $200,000. and gave it to an investment company telling the widow she would receive large monthly dividends. She was unaware the investment company was owned by the “team”. She never saw her money again and has no idea where she’s going to live.
A 90-year old woman, whose home of 40 years had been paid off fell victim to a ‘gentleman’ who had befriended her. She unwittingly signed over the deed to her home to the friend who promptly took out two loans against the property. The woman’s daughter, who drove quite a distance once a month to see her mother, had no idea her mother was scammed until she accidentally saw foreclosure papers stuffed in a desk.
Several years ago, when subprime loans were rampant, many loan providers didn’t require income verification. Many retired elders fell victim to NINA and NINJA loans (“No Income, No Asset” and “No Income, No Job, No Asset”). Many providers of these loans would lure borrowers into signing loans they knew the borrowers could never repay and would fail making payments. Retired elders were the main recipients and became victims of mortgage fraud.
Sadly, over 80% of elder mortgage abuse cases goes unreported. Elders, shamed by their failure to recognize they’ve been ‘fleeced’ don’t report the abuse and many don’t even know they’ve been abused. Depression, such as losing a spouse, isolation or dementia increase an elder’s chance of being victimized.
Anyone who conspired to take advantage of a senior citizen or vulnerable adult can be held liable in a civil suit.
Children of the elderly should be warned too. In December 2011, two men, Troy Preston and Mario McKinley allegedly obtained title to a deceased woman’s home and sold it to a third party. Preston and McKinley have been charged with forgery, theft from an elder along with other crimes.
While one warning sign does not mean elder abuse, some indicators are:
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Discrepancies between an elder’s standard of living and their financial assets Depletion of assets without adequate explanation Money or personal items (such as jewelry) missing Misuse of personal checks, credit cards or accounts Any changes in signing power of attorney, contracts or guardianship Abrupt changes in financial situations Strained relationships between the elder and caregiver Changes in personality or behavior in the elder
Financial elder abuse criminals are sophisticated and skilled. These criminals continually adapt their schemes and scams to our changing laws. Unfortunately, most of the time, when a perpetrator is caught – the stolen assets are hidden or gone.
Last year, in the United States 14.1% of people over the age of 60 suffered some type of financial abuse. The worst cases were those living alone and between the ages of 80 and 89. Investment fraud against the elderly rose 12% to $2.9. Financial abuse targeting seniors is on the rise each year with billions of dollars lost each year.
If you suspect an elder has been victim of mortgage abuse, or any abuse, contact authorities. Colorado provides protection for adults considered at-risk under Article 3.1 of Title 26 and includes financial exploitation of at-risk adults.
Keith A. Gantenbein, Jr. is a Colorado foreclosure defense attorney located in Denver and servicing all of Colorado. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, contracts and landlord/tenant. If you think you will be facing foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.
This article is not intended as legal advice. The opinions of this article are solely the opinion of the author.