Welcome to The Home Equity Theft Reporter, a blog dedicated to informing the consumer public and the legal profession about Home Equity Theft issues. This blog will consist of information describing the various forms of Home Equity Theft and links to news reports & other informational sources from throughout the country about the victims of Home Equity Theft and what government authorities and others are doing about it.
Wednesday, March 02, 2016
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.”
CBC News: Betrayal of Trust (A CBC investigation reveals how lawyers across Canada have misappropriated and mishandled clients money, to the tune of tens of millions of dollars, or sometimes even charging vulnerable people top dollar for shoddy services)
Land Contract/Contract For Deed/Rent-To-Own Rackets
The New York Times: The Housing Trap (In the wake of the housing crisis, low-income families have turned to seller financing to buy homes but these deals can be a money trap)
Beware The Fine Print: Consumers Forced To Sign Away Their Rights To Use Court System
The NY Times: Arbitration Everywhere, Stacking the Deck of Justice(Part 1 in series examining how clauses buried in tens of millions of contracts have deprived Americans of one of their most fundamental constitutional rights: their day in court)
Foreclosure Mills' Abysmal Record In Complying With New NYS Foreclosure Requirements
Justice Deceived: How Large Foreclosure Firms Subvert State Regulations Protecting Homeowners
MFY Legal Services Report On Questionable Practices By Process Servers In Debt Collection Cases
Justice Disserved: A Preliminary Analysis of the Exceptionally
Low Appearance Rate by Defendants in Lawsuits Filed in the Civil Court of the City of New York
Mortgage Mess Redux: Robo-Signers Return (A Reuters investigation finds that many banks are still employing the controversial foreclosure practices that sparked a major outcry last year)
CNN Video: As Foreclosures Mount, Florida Court Turns To 'Rocket Docket'
The Wall Street Journal: A Florida Court's 'Rocket Docket' Blasts Through Foreclosure Cases (2 Questions, 15 Seconds, 45 Days to Get Out; 'What's to Talk About?' Says a Judge)
"Produce The Note" Strategy When Dealing With Missing Promissory Notes In Foreclosure Actions
ABC Video: Fighting Against Foreclosure (Some homeowners have found a new tactic to keep the banks at bay)
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