 The Consumer Financial Protection Bureau (CFPB) today released an advisory opinion and research report on a form of home seller financing that is often referred to as contract for deed. Under contract-for-deed deals, the seller agrees to turn over a home’s deed only after the buyer completes a series of payments.
The deals often have little oversight, and investment groups and other sellers can set a series of traps that leave buyers in unlivable homes, on the hook for tax liens and expensive repairs, and at risk of losing their down payments and homes. The CFPB has found that these products often target Black, Hispanic, immigrant, and religious communities.
 Like all home purchases, a contract for deed involves a contract between a buyer and a seller. But instead of going to a separate mortgage lender for a loan, the buyer agrees to pay the seller in monthly installments.
As the buyer under a contract for deed, you must act as the property owner during the term of the contract, even though the deed is not yours yet. In a typical contract for deed, property taxes, insurance, repairs, and maintenance are paid by the buyer.
At any point during the contract term, buyers could run into problems. People living in a home paid for through a contract for deed can seek help to stay in their home instead of losing it when trouble strikes.
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