If an insured real estate transaction is later found to be void, title and settlement companies may expose themselves to escrow or policy losses. During a recent compliance webinar hosted by ALTA, 53 percent of attendees indicated they’ve handled a transaction where they observed an instance of elder abuse. It is critical to be alert to financial elder abuse and recognize the red flags.

According to the U.S. Department of Justice, financial exploitation of the elderly is one of the most frequently reported forms of elder abuse. The National Center on Elder Abuse estimates that such abuse costs older adults around $2.9 billion annually. Reported title claims involving elder abuse are on the rise as well, and on average are more expensive to resolve than other categories of claims.

Surprisingly, close to 90% of elder financial abuse takes place in domestic settings instead of long-term care facilities and is most often caused by family members according to the National Adult Protective Services. The second most common group of abusers consists of professional criminals such as home repair scammers and telemarketers. The third group consists of friends or others in a position of trust. This can be done through promises of lifelong care or through the use of a power of attorney authorizing the perpetrator to access an elder's financial assets.

Because many cases involve real estate, you should be familiar with potentially high-risk schemes. Reverse mortgages, property investment, and foreclosure-rescue offers are areas in which older people are prime targets. But another form of financial abuse—often subtler and more difficult to detect—occurs when a trusted individual exerts undue influence over elderly home owners, convincing them to sell their property, often to devastating effect.

While title and settlement agents typically don’t come into contact with the subject until the closing, it is important to be aware of red flags and proceed cautiously when encountering irregularities or unusual situations. If you remain vigilant for the signs of financial abuse, you’ll avoid becoming embroiled in real estate transactions—and possible legal actions—involving criminal or unethical exploitation of the elderly.

• Never get to speak directly with the elder person involved in the transaction
• The appearance of disorientation or lack of understanding
• The person seems unaware of dates and times
• The person seems to lack understanding of what the transaction is all about
• Recent, uninsured deeds in the chain of title
• Change in contact person or other authorized user
• Elder borrower not allowed to speak for him or herself
• No documentation to support third-party’s authority
• Use of powers of attorney or change in grant of POA
• Free and clear property
• Documents signed outside of closing
• Sales or loan proceeds paid over to somebody other than the borrower or seller
• Holder of POA wants funds disbursed to him/herself
• Holder of POA wants to perform acts beyond the scope of the POA
• Be cautious of recent changes in trustees or expansions in trustee powers
• Large cashout from a refinance or proceeds being wired to an account not belonging to the senior 

Report suspected abuse. As uncomfortable as it may be to get involved, you should report abuse if you suspect it. Your first call will likely be to your local Adult Protective Services agency. The Elder Justice Initiative of the U.S. Department of Justice also contains support resources by state. You should also notify the lender of any irregularities.