{"id":1970761,"date":"2023-07-12T13:13:02","date_gmt":"2023-07-12T17:13:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/experts-warn-private-real-estate-deals-offer-low-income-homebuyers-false-hope\/"},"modified":"2023-07-12T13:14:56","modified_gmt":"2023-07-12T17:14:56","slug":"experts-warn-private-real-estate-deals-offer-low-income-homebuyers-false-hope","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/experts-warn-private-real-estate-deals-offer-low-income-homebuyers-false-hope\/","title":{"rendered":"Experts caution that private real estate deals may give low-income homebuyers a false sense of hope."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">32<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fexperts-warn-private-real-estate-deals-offer-low-income-homebuyers-false-hope%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1970761&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div class=\"post_content\">\n<div class=\"aplayer_app\" data-source=\"https:\/\/vs1.youmaker.com\/assets\/2023\/0712\/0c74060c-7235-4074-aa33-a17210160a9e\/audio.mp3?length=4487085&#038;duration=374\"><\/div>\n<\/p>\n<h2>Why Land Contracts Are a Risky Choice for Homebuyers<\/h2>\n<p>Many aspiring homeowners see a land contract as the answer to their prayers, but mortgage experts and lawyers say they almost always result in financial calamity.<\/p>\n<p>\u201cLand contracts and leases with option to buy are both costly and destructive detours that diminish the likelihood that consumers entering these contracts will ever own a home,\u201d said Sarah B. Mancini, co-director of advocacy for the National Consumer Law Center.<\/p>\n<p>\u201cWe estimate that more than half of these transactions fail. Indeed, we believe that these transactions are designed to fail.\u201d<\/p>\n<p>Ms. Mancini testified before the Senate Banking Committee\u2019s Subcommittee on Housing, Transportation, and Community Development on July 11.<\/p>\n<p>She, and other witnesses, said land contracts, contract for deed and lease with option to own <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/experts-warn-private-real-estate-deals-offer-low-income-homebuyers-false-hope\/\" title=\"Experts caution that private real estate deals may give low-income homebuyers a false sense of hope.\">schemes disproportionately target low-income minority home buyers<\/a> who typically can\u2019t qualify for traditional mortgages.<\/p>\n<figure id=\"attachment_1571446\" style=\"width: 640px\" class=\"wp-caption aligncenter\">\n    <a href=\"https:\/\/img.theepochtimes.com\/assets\/uploads\/2015\/07\/104578793.jpg\"><figcaption class=\"wp-caption-text\"><noscript><\/noscript><\/figcaption><\/a><br \/>\n    A homeowner talks to a Wells Fargo representative during a \u201cSave the Dream\u201d event in Los Angeles to help homeowners restructure their mortgages to avoid foreclosure, in September 2010. (Kevork Djansezian\/Getty Images)<br \/>\n  <\/figure>\n<p>The plans are arrangements between buyers and sellers in which the parties agree on a selling price and payment plan. Many states don\u2019t require the deals to be recorded with the court.<\/p>\n<p>In addition, regulations differ from state to state, and many buyers know little about <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/chinese-buyers-spent-a-record-6-1b-on-u-s-real-estate-in-2021\/\" title=\"Chinese Buyers Spent a Record .1B on U.S. Real Estate in 2021\">real estate transactions<\/a>. So, they don\u2019t take advantage of the law because they don\u2019t realize they may have legal rights.<\/p>\n<p>The buyer takes on the responsibilities of a homeowner or landlord but has none of the protections afforded by law in a more traditional mortgage. In the land contract, the buyer is responsible for all repairs, taxes, liens, and other expenses, but the seller retains ownership.<\/p>\n<p>In many cases, buyers get uninhabitable homes. They may make thousands of dollars worth of improvements only to be evicted when they miss a payment or can\u2019t make an agreed-upon balloon payment.<\/p>\n<p>In addition, the deals generally don\u2019t require property inspections, title searches, or other requirements that go along with getting a mortgage from a financial institution.<\/p>\n<p>Ms. Mancini said this creates a minefield of possible hazards.<\/p>\n<figure id=\"attachment_3928343\" style=\"width: 640px\" class=\"wp-caption aligncenter\">\n    <a href=\"https:\/\/img.theepochtimes.com\/assets\/uploads\/2021\/08\/01\/shutterstock_1477538252.jpg\"><figcaption class=\"wp-caption-text\"><noscript><\/noscript><\/figcaption><\/a><br \/>\n    Land contracts often don\u2019t require home inspections which can put buyers at a disadvantage. A proper home inspection by an individual trained in inspecting a home has several advantages over other options.  (PPC Photography Cologne\/Shutterstock)<br \/>\n  <\/figure>\n<p>\u201cNo one should purchase a home without having a lawyer do a title search to make sure the person selling it actually has good title,\u201d Ms. Mancini said.<\/p>\n<p>The deals often come with <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/mark-levin-are-usually-we-better-off-these-days-than-we-were-4-years-back-hell-no\/\" title=\"Mark Levin: 'Are usually We Better Off These days than We Were 4 YEARS BACK? Hell No'\">high-interest rates<\/a>, inflated asking prices, and non-refundable deposits and fees.<\/p>\n<p>Sen. Tina Smith (D-Minn.) chairs the subcommittee. She said the practice began in the 1960s and reappeared after the financial crisis of 2008 when the housing market was flooded with foreclosed properties.<\/p>\n<p>\u201cTypically, they\u2019re targeting black and brown and immigrant communities, poor communities, groups that have long suffered from housing discrimination,\u201d she said.<\/p>\n<p>Smith pointed out that a traditional mortgage or rental contract requires specific steps to be taken if the buyer is to be evicted. In those instances, the buyer is liable for unpaid debt and fees but can keep any equity built up during the contract.<\/p>\n<figure id=\"attachment_3386304\" style=\"width: 640px\" class=\"wp-caption aligncenter\">\n    <a href=\"https:\/\/img.theepochtimes.com\/assets\/uploads\/2020\/06\/12\/GettyImages-80420686-3-1.jpg\"><figcaption class=\"wp-caption-text\"><noscript><\/noscript><\/figcaption><\/a><br \/>\n    In a land contract, the buyer can be evicted for missing a single payment. An Orange County Sheriff eviction notice in Laguna Hills, Calif., on March 28, 2008. (David McNew\/Getty Images)<br \/>\n  <\/figure>\n<p>It is different in a land contract; the buyer can be evicted for a single missed payment and loses all of their money.<\/p>\n<p>\u201cIf they default on those payments there is no requirement in Minnesota law they get any of their money,\u201d said Elizabeth Goodell of the Mid-Minnesota Legal Aid.<\/p>\n<p>Many of her clients have been taken in by unscrupulous contracts for deed businesses. She said that in Minnesota, the land contract is called a contract for deed.<\/p>\n<p>The buyers often have never bought a home, so they don\u2019t understand the process. Often, they speak little or no English or feel they have nowhere else to turn due to bad credit or a lack of credit.<\/p>\n<p>In a lease with an option-to-buy plan, the buyer leases the property for a set time and pays a fee for the option to buy the property when the lease runs out. If the buyer doesn\u2019t execute the purchase option, they lose the fee and can be evicted.<\/p>\n<h3>Many Buyers Should Rent Instead<\/h3>\n<p>\u201cContract for deed buyers most frequently come to our attention \u2026 when they are being evicted,\u201d Ms. Goodell said.<\/p>\n<p>She added that many clients would be good candidates for affordable rental units. This also means they would be good prospects for small mortgages. However, many lenders don\u2019t want to handle mortgages lower than $125,000 because they typically don\u2019t realize a good<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Many hopeful homeowners view land contracts as a solution, but experts warn they often lead to financial disaster. Lawyers and mortgage professionals argue that these contracts and lease options to buy are expensive and harmful detours, reducing the chances of consumers ever achieving homeownership.<\/p>\n","protected":false},"author":1615,"featured_media":1970762,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-1970761","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1970761","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1615"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1970761"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1970761\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1970762"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1970761"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1970761"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1970761"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}