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HousingWire Magazine: December 2021/ January 2022

AS WE ENTER A NEW YEAR, let’s look at some of the events that we can look forward to in 2022. But what about what’s next for the housing industry?

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This webinar will be a discussion on understanding what’s to come in the future of mortgage lending by analyzing past trends in the industry, evolving consumer behaviors and demographics of the industry’s production capacity.

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Wisconsin accuses rent-to-own operator Vision Property Management of harming consumers

State sues VPM over its “misleading and deceiving business practices”

One of the nation’s largest operators of rent-to-own homes is facing some serious legal trouble over its business practices.

The Wisconsin Department of Justice announced Monday that the state is suing Vision Property Management and its various affiliates for using “misleading and deceiving business practices to induce Wisconsin consumers to lease, rent, or purchase uninhabitable properties.”

The lawsuit, filed on behalf of Wisconsin’s Department of Financial Institutions and the Department of Agriculture, Trade and Consumer Protection, claims that VPM targeted low income consumers with predatory rent-to-own offers on “dilapidated” homes that the company owns

The announcement from the Wisconsin DOJ cites the New York Times’ extensive reporting on Vision’s business model. Here’s how the Times described it recently:

The South Carolina firm bought thousands of foreclosed homes from the government, turning around and reselling these often rundown homes “as is” to aspiring homeowners.

Recently, the Times reported that Fannie Mae agreed to stop selling REO homes to VPM amid complaints about the company’s practices.

And Wisconsin’s lawsuit lays out how VPM’s practices are allegedly harming consumers.

According to Wisconsin’s complaint, VPM purchases “dilapidated, often foreclosed upon,” homes across the country, and then leases the “run-down” properties to tenants without conducting any repairs or improvements.

Wisconsin’s complaint states that VPM targets tenants who may not be able to obtain mortgage financing through traditional means and induces the tenants into leasing the properties by offering them the chance to buy the house down the road.

“(VPM) purposely and systemically target(s) low income consumers and consumers with compromised credit, who lack the means to secure housing from more conventional routes,” Wisconsin’s complaint states.

But VPM requires the tenants to front the costs to rehabilitate the property, pay all the overdue taxes, and resolve any outstanding building code violations associated with the property, Wisconsin’s complaint states.

And, if the tenant does not remedy those issues within a short period of time, VPM evicts the tenant and “repeats the cycle by renting the uninhabitable property to yet another Wisconsin consumer,” the Wisconsin DOJ said in a statement.

According to the complaint, VPM rented properties with sewage in the basement; black mold; lack of water, heat, or electricity; insect infestation; and multiple code violations; among other issues.

The lawsuit accuses VPM of violating Wisconsin landlord-tenant and mortgage banking laws.

“Companies in Wisconsin whose business model relies on deceiving consumers have no place in our state,” Wisconsin Attorney General Brad Schimel said.

“DOJ works hard to keep the public safe whether that is in the area of consumer protection or the fight against opiates and drug abuse,” Schimel continued. “Today’s complaint should come as no surprise as VPM has come under scrutiny in Maryland and Pennsylvania, and has been the subject of investigative reporting in The New York Times.”

In its complaint, Wisconsin asks for VPM’s lease-to-own program to be halted immediately in the state.

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