2009: The Year Of Really Bad "Rent-To-Own" Home Purchase Contracts?

In Newport, Minnesota, Minnesota Public Radio reports:

• Melissa Joseph, 28, thought her rental house in Newport was a lucky break. She and her fiance have shaky credit, so they can't easily qualify for a mortgage. They thought buying a house with a rent-to-own agreement was an easier path to homeownership. Instead, they are involved in a dispute with a landlord who Joseph said hasn't repaired the leaky roof as he promised. Joseph said she and the landlord have argued over who said what.

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• But now, who promised what is beside the point, because the home has fallen into foreclosure. Under current law, that means Joseph's contract, and the thousands of dollars she put down, are gone. There is nothing in Minnesota law governing such rent to own deals. And that, said Lutheran Social Services' Dan Williams, is a big problem.

• "I really worry that we are going to look back on 2009 and say this was the year of really bad contract-to-own agreements and really bad contract for deeds," he said.(1)

For more, see Rent-to-own homebuying on the rise, and so are problems.

Go here and go here for stories on how easy some tenants found it in getting screwed over in lease/option, "rent to own" and "contract for deed" real estate deals.

(1) Acording to the story, Williams said the surplus of foreclosed homes in bad condition is attracting people looking for a cheap deal on a house. For many buyers, the only option may seem to be a rent-to-own arrangement or contract for deed with a cash-strapped seller. There are no hard numbers tracking this trend but there are widespread reports that these deals are on the rise. rent to own lease purchase option scams yellowstone