06/15/2021 | News release | Distributed by Public on 06/15/2021 08:46
It's June, a special month for honoring loved ones, especially parents and grandparents by raising Elder Abuse Awareness. World Elder Abuse Awareness Day is officially June 15th and it's an ideal time to educate oneself on how to protect elders from becoming victims of financial abuse. All too often, elders today are the targets of residential real estate fraud and scams. In this post, I'll explain why and how they fall victim as well as provide tips for financial caregivers and banks to combat this rapidly growing form of financial abuse.
The COVID-19 pandemic hasn't just gripped the world for the last year-it's also ignited a residential real estate boom in the US, with home sales hitting peaks not seen since 2006. However, the hot real estate market has been a stark contrast to many seniors' cooling personal finances. In January 2021, two million people over age 55 were unemployed, according to ananalysis of federal data published by the AARP Public Policy Institute. They accounted for roughly one in five jobless Americans. Half of jobless workers over 55 had been out of a job at least six months at that point, compared with 35% of younger adults, according to AARP.
To out-of-work seniors looking to stay afloat, fast cash from selling their homes can be an attractive lifeline - and fraudsters know it. They are capitalizing on elders' financial anxiety, and even sweet-talking vulnerable seniors who weren't even considering selling their homes.
With a 'get-rich-quick' siren song, scammers which may include unscrupulous 'real estate agents' convince elders to sell their homes for less than market value, and then make a large profit on the sale. Here are two popular real estate scams targeting the elderly.
Real estate scammers often rely on tricks from the con artist's playbook to trick or goad the elder into selling.
Real estate can also be lost without a pressurized sales pitch from a 'real estate agent'; it can be signed over to someone else who then records ownership at the County Recorder's Office. Unfortunately, this is sometimes done by a member of the elder's own family, typically a son or daughter strapped for cash who might even reside with a parent at the elder's home.
As the parent's cognition declines, the fraudster has the parent sign a quit claim deed or forges the parent's signature on the document. The abuser may promise to provide care until end of life or make some other promise to induce the gift. This type of financial abuse may be discovered by a brother or sister who is busy raising their own families and not involved in the day-to-day activities of the parent.
The best measures you can take to stop elder real estate abuse are preventive; importantly, these steps can help to avert financial tragedies of all kinds.
In 2011, the Consumer Financial Protection Bureau (CFPB) created an Office of Financial Protection for Older Americans. Although the laws requiring reporting of financial abuse vary from state to state, the CFPB issued a report in 2016 identifying best practices to assist banks and credit unions with their efforts to prevent abuse. Any service provider who has concerns that the borrower or seller is being exploited can take steps to ascertain the real desire or motivation of the elder, for instance:
For more information about how banks can thwart elder real estate abuse, this article by North American Title Company is an excellent resource.
Although June is Elder Abuse Awareness Month, we need to remain vigilant every day to protect our loved ones from financial abuse. If you haven't already, I encourage you to make finances and real estate a frequent topic of your regular check-in conversations with the elders in your life. Learn more about keeping your loved ones safe by reading these posts:
6 Types of COVID-19 Scams to Watch Out For
The Galloping Growth of Merchandise Muling
Keep up with the latest on fighting fraud, scams and financial abuse by following this blog.