In most places around the United States, there is a regulatory grey area for contract for deeds and rent-to-own agreements. These contracts are perpetuated in areas that were hit hard by the Housing Crisis and mostly affect concentrated areas of people of color and low-income households. These agreements let buyers believe that they will own the homes that they have poured their savings into, but the reality is that one in five contract holders will end with the title of the home in their name. The Home Savers Campaign has created a successful model to change their chances.
Our mission is to help families who have fell prey to companies who perpetuate seller-financed contracts (contracts-for-deed, lease-to-purchase, rent-to-own) through organizing, empowerment, financial education, and credit counselling.
The Home Savers Campaign organizes stakeholders into groups to advocate for change within the corporations that hold the titles to their homes; and propose policies at a city, county, and state level. Most of the families the Home Savers Campaign works with have poured their hard-earned money (including savings) into homes that they live in and want to find a way to own their homes. By building a group of affected and engaged home buyers, who felt trapped in predatory land instalment agreements we have changed corporate practices and advocated for better countywide policies.
The Home Savers Campaign won an agreement with a national company to changes its practices and agreed to build a program in conjunction with ACORN International to help families out of its contracts and into mortgages. This includes credit counselling, financial education, and a pathway to improved credits scores through a verified payment history connection (to improve credit scores).
There is a crisis in affordable housing that has deepened as the credit desert spread in the wake of the Great Recession of 2008. Hedge funds and private equity companies picked up tens of thousands of foreclosed properties at auction through sales from FNMA and as a result have flipped them, often using these predatory instruments. The campaign is determined to bring accountability to these operations and transparency to the transactions from Wall Street to Main Street.
Various companies, some with Wall Street connections, have developed a business model based on taking advantage of lower income and working families desperate for affordable housing, yet caught in the post-recession and meltdown credit desert. Families want to buy a home yet are forced into an alternative method of financing outside of guaranteed mortgages, which are now out of reach for many low- and moderate-income Americans. For example, in 2016 in Detroit, more than 50% of loans were contract purchases of these types rather than FHA guaranteed mortgage loans.
Rent-to-own schemes and contract land purchases are skyrocketing across the country. Which is why the Home Savers Campaign organizes Low-to-Moderate income families invested in the fight to change existing or propose new ordinances, policies, and legislation that will give them a real chance to decent and affordable housing.