Help to Prevent Financial Exploitation of Seniors

Help to Prevent  Financial Exploitation of Seniors

There are more than 50 million Americans aged 62 and older who are prime targets for financial exploitation, both by persons they know and by strangers. You may be one of these targets. Get information about how to avoid such exploitation and how to help others in this article.

Fraudsters are constantly looking for victims. Older ones may be less active in offensive and defensive activities, and as a result are often more vulnerable to financial exploitation than in their prior years. So what position should they be taking to withstand such an assault?

Do these things to minimize the risk of financial exploitation

  1. Establish strategic relationships. Often, the first step to take as we age is to establish and maintain a good relationship with your community bank. Community bankers are in position to know you, and to offer you helpful suggestions on how to structure account ownership and disbursal requirements. Incessant conversations do not make the relationship, but neither does a single meeting at the branch office.
  2. Get educated. Inform yourself of available resources and also common pitfalls. One good resource is the “Money Smart for Adults” program produced by the Federal Deposit Insurance Corporation and the Consumer Financial Protection Bureau. Both the FDIC and CCPB offer instructor-led training and very helpful documents that include contact information to local and regional assistance. Individuals can enroll in this program, and so can institutions. If you are evaluating elder care facilities, you might inquire about their programs and education on the topic of financial exploitation.
  3. Make a plan. Your plan should include a financial plan, also a caregiver plan that contemplates proper funding. Remember that money is the grease that helps to keep your life functioning smoothly. So don’t make it hard for your caregiver to care for you, neither make it too easy to abuse the privilege.

The important thing to remember, whether your vantage is from that of the senior or the caregiver, is that a successful aging transition requires good education, trusted advisors who help formulate the strategy, warm relationships with care-givers, and a strong support base. When your family and community banker are among that select group the right things can be done because they are properly funded, in every sense of that word.

It sounds trite to say these days, but for what it’s worth Peoples Bank cares about its community – the people and their families and their economic success. We remain committed to people, especially those whose many years merit respect and care. Let us know how we can help you and your family.

Get more information:
Press Release: FDIC & CFPB Collaborate on Tool to Prevent Financial Exploitation
Web site: Money Smart – A Financial Education Program for Older Adults

Protect Against Home Loan Fraud

Protect against home loan fraudBuying or refinancing your home is a major life decision that can be complex and, at times, risky. Most lenders and real estate professionals are focused on helping, however, predatory con artists are focused on hurting uninformed homebuyers through lending or loan fraud. Here are a few safety tips to help you be a smart home loan customer and avoid home loan fraud.

  1. Take a Class. The U.S. Department of Housing and Urban Development (HUD) has a list of approved counseling agencies that offer special courses about the basics of homeownership. These courses will cover the fundamentals of financing (what costs are associated and how they factor in at closing) and help you to be able to tell when a loan seems fishy.
  2. Do Your Homework. Make sure to check out more than one real estate professional. Also, ask for references before you pick a Realtor, and check around the neighborhood to see how much other houses sold for. This will not only help to avoid fraud, but could get you a less expensive home.
  3. Consult Trustworthy Professionals. When looking for a lender, be wary of those pushing you towards only one lender that is not obviously credible. Along with this, make sure to bring in a home inspector and stipulate who will fund repair costs and if they must be completed prior to purchase.
  4. Be Honest on Your Application. Never let anyone sway you into lying on your loan application, by embellishing your income or fibbing about your employment history. Lying on a mortgage application constitutes fraud and may result in criminal prosecution with penalties.
  5. Be Honest With Yourself. Realize what you can realistically afford, and don’t let anyone talk you into something more expensive than that. If you are unable to make your payments, you could lose your house and all the financing you invested into it. Also, make sure to tell others if you plan to rent the house you are purchasing rather than stay in it yourself long term. By neglecting or lying about these details you may be breaking federal law.
  6. Avoid Documentation Mistakes. Never sign a blank check or document containing blanks. If you have already signed, someone can add in new information that you are still contractually obligated to fulfill. Also, never sign anything you don’t fully understand, or haven’t fully read. In the case of a mortgage involving many thousands of dollars – if not hundreds of thousands—it is good to have an attorney who has specialized in real estate law read over your agreements. On a similar note, make sure to be suspicious if home improvement costs increase significantly if you don’t accept the contractor’s financing.
  7. Understand Predatory Lending. There are several ways faulty lenders make money. Some sell properties for far more than they are actually worth. Others lend more money than the borrower can pay back in the long term. Often these con artists attempt to dupe unsuspecting borrowers out of their money through high-pressure sales.
  8. Tactics to Look Out For. Be wary anytime a lender suggests they are the only way to get you a new home and urge against comparison shopping. Con artists will try to force you to sign and provide false information in documentation or change the costs of loans from what you agreed. Some will even say your property is protected under “Federal Housing Administration insurance”, which is a lie. Also keep in mind if a house is far more expensive than anything else in the region, your agent or contractor is likely trying to pull the wool over your eyes.

Buying your first home should be an exciting time, free from the hassle of faulty loans and over-paying. Make sure to follow these tips to prevent yourself from falling victim to home loan fraud. Check out these tips and other housing public service information at the HUD website. Also check out the Consumer Financial Protection Bureau (CFPB) for additional information.

The Impact of Inflation – Installment 2

The Impact of Inflation - Insallment 2

Inflation 101 – What to know, what to do

Inflation is perhaps the single-biggest influence on your economic situation. It is not properly understood by many, nor do many people make good decisions in light of it.

Peoples Bank is making the effort to address what may be an important gap in the financial efforts of its customers and others with 4 blog posts. We hope this information is more than instructive, we hope that it is meaningful, helpful. Feel free to write us with your comments, and don’t hesitate to share the link with others.

The first installment define the term and describe it in real-world terms. This one describe what you can do about it (personally) and what tools are available to deal with it. Subsequent blog posts will review how inflation effects bonds and how your retirement can be improved by dealing with it.


How Can You Fight the Effects of Inflation?

Inflation is one of the reasons people – especially those in their 20s and 30s – are often surprised by the amount they will need to save for their retirement. Inflation pushes future costs higher: as a result, the nest egg needed to produce the income you want would need to be bigger.

There are several ways to help combat the ravages of inflation on the value of your savings.

Invest to try to outpace inflation

You should own at least some investments whose potential return exceeds the inflation rate. A portfolio that earns 2% when inflation is 3% actually loses purchasing power each year. Though past performance is no guarantee of future results, stocks historically have provided higher long-term total returns than cash equivalents or bonds. However, that potential for greater returns comes with greater risk of volatility and potential for loss. You can lose part or all of the money you invest in a stock. Because of that volatility, stock investments may not be appropriate for money you count on to be available in the short term. You’ll need to think about whether you have the financial and emotional ability to ride out those ups and downs as you try for greater returns.

Bonds can also help, but since 1926, their inflation-adjusted return has been less than that of stocks. Treasury Inflation Protected Securities (TIPS), backed by the U.S. government, guarantee that your return will keep pace with inflation. The principal is automatically adjusted every six months to reflect increases or decreases in the CPI; as long as you hold a TIPS to maturity, the dollar amount of its principal will never be less than the initial amount.

Chart - The Impact of 3% Yearly Inflation on the Purchasing Power of $200,000

The Impact of 3% Yearly Inflation on the Purchasing Power of $200,000

Diversify your portfolio

Though diversification does not guarantee a profit or ensure against a loss, studies have shown that over the long term, a diversified portfolio typically has outperformed one with only a single asset class. Examples of diversification possibilities include:

  • U.S. stocks (growth/value, income-producing, large/midcap/small)
  • U.S. bonds (various maturities, taxable/tax-free)
  • Real estate (U.S. stocks/REITS, international stocks/REITS, land holdings, commercial real estate)
  • Commodities (stocks and commodity futures)precious metals (stocks and bullion)
  • International stocks (developed/emerging markets)
  • International bonds (varying maturities)
  • Alternative investments (private equity, hedge funds, natural resources, and collectibles)
  • Cash/cash alternatives (money marketfunds, CDs, money-market accounts)

Save more

If you’re saving the same amount each year, you’re not really saving the same amount; you’re saving that dollar figure minus what you’ve lost in purchasing power to inflation. Consider increasing the amount you save each year by at least the rate of inflation if you want to keep a constant savings rate.

Example: For every $1,000 you saved last year, consider saving $1,030 this year ($1,000x the 3% average historical rate of inflation). To continue at that inflation-adjusted rate, you would save $1,061 the following year.

Consider paying off credit card debt

When inflation goes up, interest rates typically do, too. You may suddenly find that purchases not only cost more when you check out; they also cost more over time if you finance them and must pay interest on that amount. Factor interest costs into any credit card purchase, especially if rates are rising.

However, inflation isn’t bad for all debt. If you have a fixed-rate mortgage on your house, the mortgage payments may have seemed huge when you first took out the loan. However, as your income and other expenses increase over time, those payments will probably represent a lower percentage of your costs. Also, because inflation tends to reduce the value of each dollar, payments made 10 years from now would be made in dollars with less buying power.

Installment 1: What Is Inflation and Why Should You Care About It?
Installment 3: Inflation and Bonds: The Ups and Downs.

Contact our Peoples Investment Services, Inc. representative at 828-464-5620 or  www.raymondjames.com/PeoplesInvSvcs. 

This information, developed by an independent third party, has been obtained from sources considered to be reliable, but Raymond James Financial Services, Inc. does not guarantee that the foregoing material is accurate or complete. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Investments mentioned may not be suitable for all investors. The material is general in nature. Past performance may not be indicative of future results. Raymond James Financial Services, Inc. does not provide advice on tax, legal or mortgage issues. These matters should be discussed with the appropriate professional.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC, an independent broker/dealer, and are not insured by FDIC, NCUA or any other government agency, are not deposits or obligations of the financial institution, are not guaranteed by the financial institution, and are subject to risks, including the possible loss of principal.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2013