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#1943049 - 07/18/14 06:16 PM possible elder financial exploitation
Madawaska Offline
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VA
What do you think of this scenario?

Bank receives a HELOC loan app from a broker; non-customer senior citizen; loan approved; disbursement info rec'd stating senior wants to gift $13,000 each to two daughters (Hmmm -- max non-tax gift)and one of the daughters is newly appointed POA; senior is visiting with POA daughter out of state and can't attend closing because of a broken bone.

Has anyone ever encountered this situation before? Has anyone in BSA ever requested questions asked at closing to verify that this is what the senior really wants to do and no one is making her do this?

Really? A senior, while visiting a daughter out of state, suddenly needs a loan to gift money (that she needs to take a loan out for!) and that one of the gift recipients is a new POA and has been assigned to act on her behalf. And the senior is not using her primary financial institution that has locations nation-wide?

Happy Friday!

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#1943059 - 07/18/14 06:23 PM Re: possible elder financial exploitation Madawaska
MagicCity Offline

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MagicCity
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Fort Lauderdale, Florida
Red flags fluttering like crazy!

I have not had a similar scenario, but I know we would not release funds until we had a comfort level from the senior.

And we would not have any of the daughters present when we speak with her.

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#1943068 - 07/18/14 06:30 PM Re: possible elder financial exploitation Madawaska
John Burnett Offline
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She can't attend the closing? I suppose the AIF daughter is suggesting she can sign for mom? This smells worse than a three-day-old fish.
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#1943072 - 07/18/14 06:33 PM Re: possible elder financial exploitation Madawaska
Elwood P. Dowd Offline
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Agreed; enough red flags to supply a color guard, particularly the one about not using her own bank.
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#1943086 - 07/18/14 06:47 PM Re: possible elder financial exploitation Madawaska
Madawaska Offline
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I gave kudos to the Loan Ops person who brought this to my attention. And, a POA would not be allowed on this transaction.

Not sure yet where the closing will be; I would love to attend it!!

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#1943109 - 07/18/14 07:08 PM Re: possible elder financial exploitation Madawaska
John Burnett Offline
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Cape Cod
I would be very, very careful about finding a way to confirm this lady's intent. And be sure that you or your loan person knows the notary who will take the woman's acknowledgment on the mortgage or deed of trust. That notary needs to be able to dead-end the closing if the woman doesn't appear to be competent.
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#1943310 - 07/21/14 12:44 PM Re: possible elder financial exploitation Madawaska
John Burnett Offline
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Cape Cod
I do hope you've reserved some time to file a SAR on this case. I think the red flag count is high enough to warrant it, and you've already expressed your concerns.
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#1943313 - 07/21/14 12:52 PM Re: possible elder financial exploitation John Burnett
Elwood P. Dowd Offline
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No question this already goes in the "To be considered" stack, but I always cringe at the thought of writing a SAR on activity that the bank could have simply said "No" to. Find a way to turn it down; e.g. unable to fully verify borrower's intent. Then, consider your SAR.
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#1943339 - 07/21/14 02:15 PM Re: possible elder financial exploitation Madawaska
Madawaska Offline
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VA
The loan approval was granted prior to receiving the disbursement request that raised the red flags. I tried to get it reversed when I was notified.

And, yes, a 'report' is warranted.

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#1943918 - 07/22/14 12:28 PM Re: possible elder financial exploitation Madawaska
Elwood P. Dowd Offline
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I was afraid of that when you mentioned the closing. You did what you could do.

Consider whether you have a reporting requirement to the state as well. Even though federal examiners will not examine for compliance with state requirements for reporting financial exploitation of the elderly, they like consistency. Reporting in one vein suggests a strong possibility that you need to report in the other.

I dealt with a bank recently where a single individual had made it her personal mission to report financial exploitation to the state and provide support to investigators, but never plugged the activity into the SAR filing process. Fatal flaw.
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#1943951 - 07/22/14 01:09 PM Re: possible elder financial exploitation Madawaska
Madawaska Offline
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Posts: 105
VA
Thanks everyone.

I have been attempting to identify which dept of aging I need to report. This transaction is covering three states: the state the elder lives in, the state she was in when the loan was applied (visiting daughter), and the state where the loan will be issued (Bank location). From past experience, I need to report 'where the incident occurred'.

The elder (borrower) has been notified that she must come to the Bank's office (where I am located) for the loan closing and sign the paperwork.

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#1944426 - 07/23/14 01:16 PM Re: possible elder financial exploitation Madawaska
Madawaska Offline
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Joined: Sep 2008
Posts: 105
VA
Well, well, well . . .

Received a communication this morning to cancel the loan. Borrower has backed out claiming she is unable to make it to our office for the closing.

I am not surprised at all, are you?

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#1944434 - 07/23/14 01:37 PM Re: possible elder financial exploitation Madawaska
Elwood P. Dowd Offline
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Next to Harvey
Actually, I'm delighted. wink
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