Fannie Mae won’t sell to lease-to-own housing firm
Government-backed mortgage lender Fannie Mae will no longer sell homes to Vision Property Management, a company that markets lease-to-own homes to people who likely would not qualify for a traditional mortgage.
The Post-Gazette and other news organizations have reported on problems with such deals.
Last year, a woman whose difficulties with a rent-to-own home from Vision were detailed by the
Post-Gazette filed a complaint with the Pennsylvania Attorney General's Office over what she alleged were deceptive practices.
Several Vision tenants interviewedby the Post-Gazette last year described similar stories — thinking that they had purchased a home from the South Carolina-based company, investing thousands of dollars in repairs to basic items such as plumbing to make the home habitable, and then learning they were not in fact homeowners and were being evicted after fallingbehind in payments.
Vision owns dozens of properties locally, many of which it bought inexpensively in the wake of the housing crisis and recession. It had denied any wrongdoing, saying it took the time to walk clients through the agreements they were signing.
“Following an extensive review, Fannie Mae will no longer sell REO properties to Vision Property Management,” said a statement from the government-controlled entity, referring to real estate owned houses. “Fannie Mae remains committed to providing liquidity, stability, and affordability to the U.S. housing and mortgage markets and being a leader and innovator in neighborhood stabilization efforts.”
In a statement, Vision said it “understands that Fannie Mae is temporarily suspending sales to companies that offer lease agreements with options to purchase and contracts for deed in order to engage with these industries to ensure that all purchasers have in place responsible business practices.” It said it “has been delighted to play a leading role in developing and promoting best practices in its segment of the market.”
Consumer advocates and legal aid attorneys had criticized the rent-to-own deals as taking advantage of tenants who were not financially sophisticated and being a “worst of both worlds” between renting and home ownership without the legal protections of either status.
“It’s well-documented that the easing of the devastating 2008 home ownership crisis resulted in an increasingly critical lack of habitable, stable and affordable leased residential property for those who lack sufficient income and resources to obtain mortgages or pay increasingly exorbitant rents demanded by developers,” said Eileen Yacknin, litigation director at Neighborhood Legal Services Association, who represented tenants who were fighting to stay in the homes they thought they owned in North Braddock and Dravosburg.
“I’m very heartened that, due to the national and local press which first raised awareness of this new aspect of the nation’s housing crisis, Fannie Mae will no longer sell its housing stock to these predatory companies,” she said.