More Land Contract Horror Stories: "People Are Often Overjoyed At The Prospects Of Owning Their Own Home, So They Go In Blind & Fall Into A Trap" Says Lawyer Representing Clients Stuck w/ Uninhabitable 'Money-Pit' Homes

In Detroit, Michigan, The Detroit News reports:

• It seemed like a sweet ticket to the American dream for Douglas Todd.
  
  Put $1,400 down, make monthly payments of $400 and own a house within five years. So he told his daughter, who also agreed to buy a home in northwest Detroit last year for similar terms. Now, after seven months and $5,000 in payments and renovations, Todd isn’t any closer to owning the brick house in northwest Detroit.
  
  In fact, both he and his daughter could soon lose their homes. Todd is amid a protracted legal fight that’s involved four eviction hearings since January. His daughter, Jessica Todd, faces tax foreclosure next month.
  
  “I wanted a house to leave to my grandkids instead of renting for all these years and having nothing to show for it,” said Todd, 53, a laborer who cleans steel mills. “I wish I never would have signed it.”
  
  Welcome to the murky world of land contracts and similar private-party home financing such as lease to own. Largely unregulated, land contracts and similar deals have soared in Detroit since the mortgage meltdown, attorneys and housing advocates say, contributing to evictions in a city that leads the nation in them.
  
  Last year, there were more land contracts than home mortgages in Detroit: 2,177 to 2,023, according to records from Wayne County and RealtyTrac, a California-based real estate data company. The numbers are likely far higher, experts say, because there’s no requirement the contracts be publicly filed.
  
  Macomb and Oakland counties each recorded about 750 land contracts last year.
  
  Land contracts don’t cause as many problems there as ones in Detroit, which often involve ramshackle homes purchased from tax foreclosure auctions and contracts that are “written to fail,” contended Joon Sung, deputy chief counsel of Michigan Legal Aid and Defender Association, a nonprofit that represents the needy in court.
  
  “People are often overjoyed at the prospects of owning their own home, so they go in blind and fall into a trap,” Sung said.
  
  ***
  Cylenthia LaToye Miller, one of four 36th District Court judges in Detroit assigned to handle evictions, said she’s increasingly seeing the lease-to-own land contracts go bad.
  
  Before noon on a recent Friday, Miller handled four eviction cases involving deals similar to the Todds.
  
  She handled Douglas Todd’s case and repeatedly expressed frustration over the arrangement. She said the state Legislature “might want to take a look at” lease-to-own land contracts, arguing they may violate state law by forcing renters to live in uninhabitable homes.
  
  “They have become popular but they are problematic to say the least,” Miller said.
  
  ***
  “Everyone knows what is going on. People are gaming the system,” said [attorney Joe] McGuire of the nonprofit Michigan Legal Services. “People who enter these contracts end up paying a whole lot more than they would by renting. But have nothing to show for it.”

For more, see Land contracts trip up would-be homeowners. contract for deed