When something seems too good to be true, often times it is, and, unfortunately, many low-income homebuyers are finding their ability to purchase and live in a home was just that; too good to be true.
According to The New York Times, the issue is arising from investors who are scooping up broken-down, dilapidated homes and are then finding low-income buyers who are unable to get traditional mortgages and instead offering them high-interest, long-term loans called a contract for deed.
The problem begins when these low-income buyers are unable to repair the houses enough to make them livable and end up heavily in debt, meaning the transactions typically end with a quick eviction and the buyer feeling taken advantage of.
Across the country, it is estimated that more than three million people have bought a home through a contract for deed, due in large part to the financial crisis that led banks to shy away from lending to those with poor credit.
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