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The reader`s research also suggests that sales of deed contracts continue to take place primarily in communities of color. A public record search revealed at least 380 properties in Cook County purchased by Harbour, Vision, Battery Point or affiliated limited liability companies since 2009. While this is a fraction of the roughly 430,000 residential property sales that have taken place in Cook County since 2009, there is concern about the increasing prevalence of contract sales — and their concentration in communities still struggling to recover from the housing crash. According to the latest available U.S. Census data, Cook County has about 24 percent African Americans and 25 percent Hispanic or Latino. But according to an analysis of our data provided by mapping technology and spatial analysis company Esri, more than 90 percent of the properties identified were in mostly non-white census areas. In addition, more than three-quarters were located in predominantly black census areas, including 87 percent of Battery Point-affiliated properties, 76 percent of those associated with Harbor, and 79 percent with a vision. No matter what type of property you`re looking for, URB Chicago offers properties in the south and west sides of Chicago such as Englewood, Lawndale, Roseland, Gresham and Ashburn and more. The contract for deed houses actually goes under many names such as a land contract or an installment purchase agreement and this is how URB Chicago provides homes for sale by the owner. “We are proud of Harbour`s role in rebuilding communities after the 2008 mortgage crisis,” the statement said. “Harbour has offered families the opportunity to get a home, potentially improve their credit score and create wealth for themselves and their children. We cannot understand the negative opinions of some media when the majority of our buyers have benefited much more than if they had been forced to remain tenants for life.
We do everything we can to work with our borrowers in case they default on their payments. In addition, we want to ensure that our buyers are offered every opportunity to stay at home and help them get a conventional loan whenever possible. Take Smith`s house, for example. If she had worked with a real estate agent, as most traditional home buyers do, she might have learned that Harbour bought Fannie Mae`s home in 2011 for just $519. But Smith didn`t know it when she signed a contract in December 2011 promising to pay Harbour $34,025 for the house. She also didn`t know — though the details were laid out in her multi-page contract — that at the 10% interest rate Charged by Harbor over a 30-year period, she would pay a total of $107,492.40 for the house — if she didn`t default first. But CLB attorney Bolling Mancini, who reviewed the company`s contract for the reader, said that “additional terms that are not common with most land contracts still do not alleviate all concerns about these transactions.” In addition, records show that Harbour and Vision have resold dozens of their properties in Cook County to other companies, a practice that can expose contract buyers to the risk of losing their homes, even if they are currently required to pay: If there are no public documents of the contract, the new company may refuse to comply with it. One of the companies that eventually bought a home in Harbor, Z Financial Illinois G Properties, made headlines last year when it unloaded the deeds of several of its properties on a homeless man after the city filed lawsuits to force the company to rehabilitate or demolish dilapidated homes. Smith isn`t the only one dealing with this kind of extreme markup. A vision contract evaluated by the reader requires the client to pay $128,640 over a 30-year period for a home the company purchased for $5,350 the previous week. Smith is also probably not the only contract buyer whose home was in much worse condition than she expected.
The city filed dozens of lawsuits against businesses for violating the city`s housing code and, in many cases, eventually ordered the demolition of a property. Proponents of housing construction fear that contract sellers will create a public safety problem by selling dilapidated homes to low-income buyers who might not be able to afford expensive repairs in addition to high monthly payments. In 2012, for example, a Minneapolis couple sued Vision, claiming, according to the complaint, that the company knowingly sold them a lead-painted home and removed a neon green danger sticker that the city had placed on the front door before the purchase. The company settled the lawsuit for an undisclosed amount, according to the New York Times. In addition, many potential owners could default before this date, according to the reader`s research. Since 2015, Vision and associated LLCs have requested the deportation of more than 40 people. While it`s unclear how many of the company-owned at least 330 Cook County properties were sold through deed contracts, this suggests a default rate of at least 12 percent. The delinquency rate for all residential mortgages was 4.15% in October 2016. When asked how many contract buyers had successfully made their payments and received the deed of ownership of their homes, neither Vision nor Harbour responded to the reader. Healey of Battery Point Trust said none of the company`s contracts have been paid to date, but that he expected to see “significant action as the portfolio seasonally adjusts,” as most contracts are “less than a year old.” Healey also said the company has taken steps to recover less than 1 percent of properties sold through contracts so far. For consumers like Smith, Illinois law offers little recourse. In the event of a default, there is nothing to prevent contract sellers from putting all the money a customer has put into payments and repairs in their pockets and moving on to the next buyer.
The state grants specific protection to buyers of contracts: those who have been under contract for more than five years and owe less than 80 percent of the original purchase price cannot be applied without being enforced, says Daniel Lindsey, an attorney at the Chicago Legal Assistance Foundation, who reviewed the contracts of the three companies for the reader. But anyone who defaults in advance — or unexpectedly ends up in repairs for thousands of dollars — is out of luck. Basic protections apply to consumer fraud – if a company has lied about the condition of a home, for example – but instead of going to court to prove it, many contract buyers simply leave. .
