…the worst possible product for an elder
Reverse mortgages are becoming a high profile example of the many ways in which financial elder abuse can occur. Older spokesmen picked for their trustworthy demeanor appear in endless television commercials that attempt to sell a trusting senior a product that would benefit the mortgage broker greatly, but amounts to the worst possible product for the senior in the later stages in of life.
These reverse mortgage marketers are very adept and skilled in the methods of successful selling to seniors. For example, one well organized group of marketing advisors is telling the sellers of reverse mortgages , “These [senior] consumers understand that simply having a reverse mortgage offer mentioned on the AARP website and through most senior web links is an excellent way to gain trust from your [mortgage] candidates as most of the seniors that would respond to this ad have had some contact or consideration with the AARP”
By associating trustworthy sources with their products, these marketers are pushing their products with a pervasive intensity that is designed to create a need for a reverse mortgage and to break down whatever resistances the seniors may have.
…an elder without a place to live
Incurring the debt of a reverse mortgage may be acceptable as long as the senior can live in that home. If the senior finds that they have to move out of the home into assisted living or a nursing home, the mortgage becomes due. Now, there is the expense of paying the reverse mortgage off, as well incurring the high cost of the assisted living or nursing home care. A situation like this can leave an elder without a place to live.
In 2006, the California state legislature passed SB 1609 which protects seniors from elder financial abuse associated with reverse mortgages. First, it requires that seniors receive financial counseling from a HUD approved counselor before applying for a reverse mortgage. Second, it requires lenders to prepare loan documents in the language in which the reverse mortgage was negotiated. Finally, it prohibits lenders from requiring a borrower to purchase an annuity as a condition of the loan.
DiJulio Law Group