Robert Wagner is an 82-year-old former movie star (really more of a TV star and don't let that 43-year-old photo fool you), who lately is probably better known to the non-elderly as 1. the guy who argued with Natalie Wood before her body was found off Catalina Island, and 2. star of reverse mortgage commercials. Not that we have anything personally against “RJ” as his adoring former leading ladies lovingly called him at a recent "92nd Street Y" event (in New York City) called, “Pioneer Women of Television.” Doesn’t he know that he’s a spokesperson for an industry that has been ruining the lives of his own age group?
At least that’s according to today’s New York Times front-page story about how reverse mortgage loans, “which allow homeowners 62 and older to borrow money against the value of their homes and not pay it back until they move out or die” and “are supposed to help seniors stay in their homes are in many cases pushing them out.” The Times found rampant abuse against the elderly by many in the reverse mortgage industry:
Some lenders are aggressively pitching loans to seniors who cannot afford the fees associated with them, not to mention the property taxes and maintenance. Others are wooing seniors with promises that the loans are free money that can be used to finance long-coveted cruises, without clearly explaining the risks. Some widows are facing eviction after they say they were pressured to keep their name off the deed without being told that they could be left facing foreclosure after their husbands died.
Now, as the vast baby boomer generation heads for retirement and more seniors grapple with dwindling savings, the newly minted Consumer Financial Protection Bureau is working on new rules that could mean better disclosure for consumers and stricter supervision of lenders. More than 775,000 of such loans are outstanding, according to the federal government. …
Mark S. Diamond, a former subprime mortgage broker in Chicago, who has been sued for fraud by the Federal Trade Commission and the Illinois attorney general, faces a federal lawsuit filed in June by seniors who claim that he sold them reverse mortgages and either pocketed their loan amounts or promised to put the proceeds toward home repairs that never materialized. A lawyer for Mr. Diamond did not return calls for comment. Some solicitations reviewed by the Consumer Financial Protection Bureau present reverse mortgages as “free money” or mistakenly tell seniors that they could never lose their home. One Maryland reverse mortgage lender tells seniors that they can put the proceeds toward a vacation: “Just because you’re retired doesn’t mean you don’t need a vacation every now and then.” Last year, the Massachusetts Commissioner of Banks issued cease-and-desist orders to a handful of reverse mortgage firms for operating without a license. In its advertising, one of those mortgage brokers falsely promised seniors “you won’t lose your home.”
In addition to the Illinois AG, Minnesota AG Lori Swanson, who has been a star on the financial crime and arbitration abuse fronts (see e.g., here) is “working on reforming the reverse mortgage market.”
But that’s not the only problem for seniors these days. It’s not enough that many healthy seniors are losing their homes and sick seniors often must live out their remaining days in nursing homes. Now, wealthy trade associations (like the American Health Care Association – the largest trade association representing the interests of many nursing homes) are targeting them too, hiring insurance consulting firms to issue reports trying to convince lawmakers to strip away the legal rights of families when nursing homes abuse and/or neglect their loved ones. See this response from Consumer Voice to an outrageously misleading report issued earlier this year from Aon Risk Solutions. See more here and here. In an earlier post, we discussed the enormous pitfalls posed by unethical pre-dispute (and pre-treatment) mandatory binding arbitration clauses in nursing home contacts.
No doubt, "RJ" has enough money and people around him to protect him from fraud, abuse and neglect, which jeopardizes the “non-celebrity” elderly. So if we can’t get his attention, how about those 75 million baby boomers who are on the verge of retirement (many of whom are caring for elderly parents as we speak)?