Government at all Levels Needs to Act on Contract Purchase Predators – Now!

New Orleans   Advocates and lawyers are firing more and more bullets at contract purchase predators and the Home Savers Campaign has raised the ante on its demands to Fannie Mae (FNMA) in yet more signs that the offensive against these real estate robber barons is gaining increased traction.

Another front has opened with the filing of a lawsuit by Fair Housing Center of Central Indiana at the end of May. They went after local operator Empire Holding Company and its subsidiary Rainbow Realty, that has acquired over 1000 dilapidated houses in the Indianapolis area and is marketing them as contract purchase rent-to-own properties. The owner admits that virtually all of them are uninhabitable. The Fair Housing Center argues that they are breaking a pile of laws, but also makes the claim that a huge percentage of these houses are in African-American areas and that the contract sales push is directed at these same populations in a discriminatory manner.

Sarah Mancini and Margot Saunders, both of the National Consumer Law Center, and experts in this area, make a similar case in looking at the metro Atlanta area in an article pointedly entitled, “Land Installment Contracts: The Newest Wave of Predatory Home Lending Threatening Communities of Color,” in a recent issue of Communities & Banking. They call attention to the work of the Atlanta Legal Aid, saying,

Atlanta Legal Aid attorneys conducted a search of property tax records in six metro Atlanta counties and found 94 properties currently held by Harbour Portfolio in the Atlanta area; most of these homes were likely being sold through land installment contracts as that is Harbour’s business model.9 Nearly all those properties (approximately 93 percent) were located in census blocks that are at least 60 percent nonwhite, and a significant majority were in census blocks that are at least 90 percent nonwhite.

It’s hard to avoid underlining the obvious. First, the scale of this activity is huge, when you are talking about a local company in Indianapolis alone handling more than 1000 such houses. In an evil local market, they dominate any other national players. Secondly, these are not equal opportunity predators, but are de facto discriminators.

For these reasons and others, the Home Savers Campaign is also increasing the pressure by sending a letter to the head of Fannie Mae today, asking that the agency investigate and bar not only Vision Property Management, as they did recently, but also Harbour Portfolio. In addition the campaign named a number of companies using the same practices in the Detroit market and demanded that they also be barred, indicating as well they they wanted a meeting with FNMA in order to push for clearer standards to block access to government auctions in the future to any company that plans to sell them “as is” through land installment contracts. Home Savers Campaign also indicated that it intends to make similar demands city to city in other markets for FNMA bans, as they understand the FNMA criteria better.

It’s bad, and it’s on!

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Building a Fighting Force to Stop Evictions and Win Affordable Rents

ACORN Bristol

New Orleans    Tenancy is rising, and it’s expensive. People are being pressed up against the walls. The old rule of thumb that rent and housing costs should not be more than 30% of income, similar to the old Brooke Amendment named after the legendary African-American Senator from Connecticut, has long been in ruins.

This is a global issue.

ACORN affiliates in Scotland amassed to fight evictions in both Glasgow and Edinburgh in recent weeks. ACORN in Bristol is currently involved in a rent strike and has beaten back numerous evictions.

When we were recently in Detroit, we met with a very active and effective organization there called the Detroit Eviction Defense. The group meets weekly and was diversely populated with younger activists, retired union professionals, lawyers, former journalists, professors, and of course tenants. The actions and victories on their website is impressive.

Evictions are a growing issue.

Researchers, Joshua Akers and Eric Seymour in Detroit shared with us soon to be published data on evictions which were eyeopening to us. In a data set they had accumulated over the decade between 2005 and 2015, these University of Michigan whizzes had separated the nearly 7500 contract “purchases” from the total of 80,000 total acquisitions involving tax delinquency or foreclosure auctions. Although we had thought a primary part of the business model for contract pushers was evictions and indeed they generate more, but it was a matter of degree at 1 out 3 compared to 1 out of 4, between the two, with both at outrageous levels.

A paper by the researchers connected to the Federal Reserve Bank in Atlanta, led by Flora Raymond (and shared with us by our wolverine comrades) notes that Atlanta is out of the box compared with other cities and no small part of this issue is driven by the increased corporate ownership of rental units and businesses that make evictions and the collection of late fees a fundamental part of their business model, similar to the recent news reports of the Kushner operation’s methods in the Baltimore area. The paper notes that,

In Fulton County, an average of 107 eviction notices are filed each day, for a yearly total equal to 22 percent of all rental households. In Milwaukee … 16 percent of all rental families are evicted. A similar rate occurs in Fulton County, where 15 percent of all rental households are evicted. Eviction rates are highest among multifamily rentals, but they are also prevalent in single-family rentals. We find that large corporate owners in the single-family rental business are more likely than small landlords to evict tenants, even after controlling for parcel level and neighborhood-level factors.

Our Home Savers Campaign is finding that our members are frequently entering the predatory land installment contracts not because they are wide-eyed about becoming home owners, but even more frequently because they are desperate for affordable housing regardless of condition, if they think they can manage the lower monthly payments, regardless of the predatory scam.   Something is happening here, Mr. Jones!

It’s been widely reported and at the grassroots level, painfully realized, but Raymond and her co-authors state it plainly,

The number of renters with high housing cost burdens has reached record levels in the United States. Over 21 million households spend more than 30 percent of their income on rent; 11 million of those spend more than 50 percent, which is considered severely cost burdened. Much of the increase in households reporting housing insecurity can be attributed to soaring rents as demand for rental housing climbs (Joint Center for Housing Studies of Harvard University, 2016).

Add it up and the numbers are staggering. About 27,000 evictions in Atlanta’s Fulton County every year, and eviction rates in Milwaukee at 16%, Chicago 7%, Cleveland 11%, and the beat goes on and the family and community tragedy it represents increases. Take 21 million paying more than 30% of income on rent and another 6 million contract buyers, and millions of renters facing the street over and under these figures who are facing eviction, multiply them by all members of their households, and we have a huge constituency that would seem to be ripe for both organization and action.

Like the old buffalo hunters, I’ve got my ear to the ground to see if I can hear a movement coming.

Please enjoy Blackleg Miner by Offa Rex (The Decemberists & Olivia Chaney).

Thanks to KABF.

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