Why contract for deed arrangements can be risky for homebuyers

Why contract for deed arrangements can be risky¹ for homebuyers

　　Transcript²

　　Some people who can't qualify for a mortgage, turn to a thinly regulated arrangement called contract for deed. Similar to renting to own, it rarely results in a buyer taking possession of the home.

　　A MARTINEZ, HOST:

　　Prospective³ homeowners who can't qualify for a home loan are often desperate to find options that don't involve a bank or mortgage lender. An alternative called contract for deed started booming after the housing bubble popped in 2008. But homebuyers beware - the arrangement can be a risky one. Steve Vockrodt of the Midwest Newsroom reports.

　　STEVE VOCKRODT, BYLINE⁵: Most people who buy a house simply apply for a mortgage and close on the property they want. That's the last time they deal with the seller. But some who can't qualify for a loan opt⁴ for another method of financing a house purchase, where the seller basically also acts like the lender. Contracts for deed and similar transactions, like renting to own, are thinly regulated in most states, and they often don't result in the buyer actually owning the home.

　　LANCE LOWENSTEIN: Contracts for deed are kind of like the buy-here, pay-here car lots of the real estate business.

　　VOCKRODT: That's Lance Lowenstein, a Kansas City attorney who says he sees cases where the buyer is trapped in a deal that went sideways about once a week.

　　LOWENSTEIN: They exist to allow people that don't have access to traditional banking⁶, either because of their credit history or their job status - it gives them an opportunity to buy real estate.

　　VOCKRODT: Contracts for deed and similar arrangements, like renting to own, happen all across the country, and it's hard to get precise data because they're not regulated the way mortgages are. The way these deals often work is the seller collects a down payment and then gets monthly installments⁸. The buyer is usually on the hook for taxes, insurance and any repairs. And unlike a mortgage, it's the seller who holds onto the title until the house is paid off. That means if a buyer falls behind on their payments, sometimes even one installment⁷, the seller can reclaim⁹ the property, leaving them with no equity¹⁰ and losing any money that they spent in proving the property. Many of these houses are in poor condition and in low-income neighborhoods.

　　For people who can't get a mortgage, such arrangements can be their only path to buying a house. And sometimes they work out just fine. But housing advocates say often they don't. Sarah Mancini of the National Consumer Law Center says more often than not, they're risky for buyers.

　　SARAH MANCINI: The buyer is being told they have all the duties of homeownership, but they don't get the protections of a right to a foreclosure, and they don't have a deed, and they don't have a right to sell the home and realize the equity.

　　VOCKRODT: Silvia Juarez was one of these buyers. A few years ago, the 51-year-old saw a house she liked in Kansas City. She called the number on the for-sale sign and soon met the owner at a nearby Denny's. She had lots of questions about the house but says the owner pressured her to make a quick decision.

　　SILVIA JUAREZ: But he told me, do you want a house? And he said, well, you have to decide now because I got more people that want the house.

　　VOCKRODT: Though she was confused by the terms of the contract, she signed it and made an $8,000 payment, thinking she'd just bought the house. Within months, she was evicted¹¹ for not making monthly payments. Following the housing crash of 2008, Wall Street-backed firms bought up thousands of foreclosed or abandoned properties on the cheap to sell using a contract for deed arrangement. Some are facing lawsuits¹², accusing them of trapping buyers into predatory contracts that are designed to fail. As foreclosures are on the rise again, housing advocates worry that these risky contract for deed arrangements will again become a popular but risky last resort for prospective homeowners.

　　For NPR News, I'm Steve Vockrodt in Kansas City.

1 risky   

adj.有风险的，冒险的

参考例句：

• It may be risky but we will chance it anyhow.这可能有危险，但我们无论如何要冒一冒险。
• He is well aware how risky this investment is.他心里对这项投资的风险十分清楚。

2 transcript   

n.抄本，誊本，副本，肄业证书

参考例句：

• A transcript of the tapes was presented as evidence in court.一份录音带的文字本作为证据被呈交法庭。
• They wouldn't let me have a transcript of the interview.他们拒绝给我一份采访的文字整理稿。

3 prospective   

adj.预期的，未来的，前瞻性的

参考例句：

• The story should act as a warning to other prospective buyers.这篇报道应该对其他潜在的购买者起到警示作用。
• They have all these great activities for prospective freshmen.这会举办各种各样的活动来招待未来的新人。

4 opt   

vi.选择，决定做某事

参考例句：

• They opt for more holiday instead of more pay.他们选择了延长假期而不是增加工资。
• Will individual schools be given the right to opt out of the local school authority?各个学校可能有权选择退出地方教育局吗？

5 byline   

n.署名；v.署名

参考例句：

• His byline was absent as well.他的署名也不见了。
• We wish to thank the author of this article which carries no byline.我们要感谢这篇文章的那位没有署名的作者。

6 banking   

n.银行业，银行学，金融业

参考例句：

• John is launching his son on a career in banking.约翰打算让儿子在银行界谋一个新职位。
• He possesses an extensive knowledge of banking.他具有广博的银行业务知识。

7 installment   

n.(instalment)分期付款；(连载的)一期

参考例句：

• I shall soon pay the last installment of my debt.不久我将偿付我的最后一期债款。
• He likes to buy things on the installment plan.他喜欢用分期付款法购买货物。

8 installments   

部分( installment的名词复数 )

参考例句：

• The first two installments were pretty close together in 1980. 第一次和节二次提款隔得很近，都是在1980年提的。
• You have an installments sales contract. 你已经订立了一份分期付款的买卖契约了。

9 reclaim   

v.要求归还，收回；开垦

参考例句：

• I have tried to reclaim my money without success.我没能把钱取回来。
• You must present this ticket when you reclaim your luggage.当你要取回行李时，必须出示这张票子。

10 equity   

n.公正，公平，（无固定利息的）股票

参考例句：

• They shared the work of the house with equity.他们公平地分担家务。
• To capture his equity,Murphy must either sell or refinance.要获得资产净值，墨菲必须出售或者重新融资。

11 evicted   

v.（依法从房屋里或土地上）驱逐，赶出( evict的过去式和过去分词 )

参考例句：

• A number of tenants have been evicted for not paying the rent. 许多房客因不付房租被赶了出来。
• They had evicted their tenants for non-payment of rent. 他们赶走了未交房租的房客。

12 lawsuits   

n.诉讼( lawsuit的名词复数 )

参考例句：

• Lawsuits involving property rights and farming and grazing rights increased markedly. 涉及财产权，耕作与放牧权的诉讼案件显著地增加。 来自辞典例句
• I've lost and won more lawsuits than any man in England. 全英国的人算我官司打得最多，赢的也多，输的也多。 来自辞典例句