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, January 18, 2017
New York Times On "Housing That Ruins Your Finances and Your Health"
From an op-ed column in The New York York Times:
Of the nearly one million foreclosed houses sold by Fannie Mae, the government-run mortgage giant, since the housing bust, tens of thousands were decrepit, moldy and unfit for human habitation.
Investor groups rounded them up anyway and turned them into cash cows by using “rent-to-own” leases or “contracts for deed.” These arrangements, which are basically long-term, high-interest installment contracts, require a resident to make an upfront, nonrefundable payment upon moving in and then make monthly payments to the investors. The resident is also responsible for all repairs.
The deals are pitched as a way for the resident to eventually own a home, but most occupants, who are typically poor people of color, are forced to walk away with nothing as the costs become unmanageable. When that happens, the investors, who generally paid less than $10,000 for each house, enter into new deals with new occupants.
One such owner noted in the article is Vision Property Management, based in Columbia, S.C., which has more than 6,000 homes across the nation. In Maryland, where the company has been fined and sued for lead contamination, it has argued that its contracts held the occupants wholly responsible for repairs. In Minnesota, where it was sued for a lead paint problem, it has argued that the occupants should have seen a posted warning sign.
Another big player, Harbour Portfolio Advisors of Dallas, recently refused to comply with a formal request for information from the Consumer Financial Protection Bureau, which is investigating potential abuse, deception and predation in contracts for deed. The agency has sued the company in federal court in Michigan to obtain the information.
Rent-to-own and similar housing schemes exist in a legal gray area in which owners can maneuver to avoid consumer-protection laws, norms and regulations that apply to landlords and mortgage lenders. Landlords are generally responsible for keeping rental homes in good repair, including lead abatement, while renters are usually entitled to get their deposits back when they move. No such safeguards exist in the murky world of installment contracts.
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)
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