Fannie Mae is cracking down on selling foreclosed homes to firms that it says engage in abusive forms of seller financing, which could include rent-to-own leases or longer term installment contracts known as contract for deed, The New York Times reports.
In its first action on the new policy, Fannie Mae said it would no longer sell properties to Vision Property Management, which operates in more than a dozen states and is one of the largest firms in the rent-to-own business. Fannie sold thousands of rundown homes to Vision and its competitors at bargain prices following the foreclosure crisis.
In recent months, Vision has been investigated by federal regulators and lawmakers who have accused the firm of taking part in predatory lending practices in real estate. Among those accusations: buying rundown homes from the government and then spending no money on renovating the homes and reselling them “as is” to aspiring homeowners. Vision and other firms allegedly then put the task on tenants to bring the properties up to code, or the tenants risked losing their contract.
Representative Elijah E. Cummings, D-Md., a ranking member of the House Committee on Oversight and Government Reform, has publicly criticized Vision for failing to cooperate with the investigation and not providing requested documents. Vision denies that it's engaged in such obstruction.
“We’ve provided them with every single relevant document that they have asked for,” says Doug Gansler, a lawyer with Buckley Sandler who represents Vision. “We have fully cooperated because the mission is to provide homeownership.”
Fannie Mae officials also said this week that they will be reviewing how investors who purchase more than 25 foreclosed homes a year are using the properties. They plan to ask those investors to provide data about the homes.
Fannie has resold about 400,000 homes to investors over the past decade. That includes more than 10,000 homes to firms that specialize in seller-financed deals.
Source: “After Complaints, Fannie Mae Will Stop Selling Homes to Vision Property,” The New York Times (May 23, 2017)
