States Acting to Protect Buyers of Seller-Financed Homes

States Acting to Protect Buyers of Seller-Financed Homes<br />In Ohio, Michele Lepore-Hagan, a Democratic state representative from Youngstown, introduced a bill on Tuesday<br />that would require property owners to solve any housing code violations and pay outstanding fines before selling the homes to buyers in contract-for-deed transactions or in similarly structured rent-to-own leases.<br />Sales of rundown homes on long-term installment contracts — sometimes called contracts for deeds or land contracts —<br />to people who could not qualify for a traditional mortgage are surging in several states, especially in the Midwest.<br />Legislators in three Midwestern states are taking steps to protect consumers who buy cheap<br />and often rundown homes from investors through seller-financed deals or rent-to-own leases.<br />Nonetheless, the deals have made a comeback over the past decade<br />because the housing crisis created a ready supply of foreclosed homes for speculators and investment firms to buy and then resell.<br />The legislative initiatives in Ohio, Illinois and Michigan come as the Consumer Financial Protection Bureau<br />continues to investigate the activities of some of the larger firms in the seller-financing home business.