[Marxism] Seller-Financed Deals Are Putting Poor People in Lead-Tainted Homes

Louis Proyect lnp3 at panix.com
Tue Dec 27 11:30:12 MST 2016


NY Times, Dec. 27 2017
Seller-Financed Deals Are Putting Poor People in Lead-Tainted Homes
By ALEXANDRA STEVENSON and MATTHEW GOLDSTEIN

BALTIMORE — A year after Tiffany Bennett moved into a two-story red 
brick house at 524 Loudon Avenue here, she received alarming news.

Two children, both younger than 6, for whom Ms. Bennett was guardian, 
were found to have dangerous levels of lead in their blood. Lead paint 
throughout the nearly 100-year-old home had poisoned them.

Who was responsible for the dangerous conditions in the home?

Baltimore health officials say it was an out-of-state investment company 
that entered into a rent-to-own lease with the unemployed Ms. Bennett to 
take the home in 2014 “as is” — chipping, peeling lead paint and all.

Ms. Bennett, 46, and the children moved out, but they should never have 
been in the house at all. City officials had declared the house “unfit 
for human habitation” in 2013.

Throughout the country, tens of thousands of rundown homes have been 
scooped up by investment companies that have offered high-interest 
financing or rent-to-own deals largely to poor people. Many of these 
homes were foreclosed on during the housing crisis.

These investors, however, often put no money toward renovation, or for 
fixing lead paint problems. The low-income buyers and renters are forced 
to make all repairs. When there are serious problems with the homes, 
victims can be required to sign confidentiality agreements to keep them 
quiet in a settlement after they have been compensated, as happened in 
Ms. Bennett’s case.

As a result, seller-financed housing contracts have aggravated a 
persistent problem of lead poisoning among young children in this country.

About 535,000 children a year nationwide test positive for lead in their 
blood, which can cause brain damage and other developmental delays. 
Problems with lead-tainted water in Flint, Mich., put the issue on the 
map. Yet exposure to lead paint in aging and poorly maintained homes 
remains the biggest source of poisoning.

It is not known how many homes nationwide are in seller-financed 
contracts, and not every state requires that such contracts be recorded. 
Still, health officials say they are increasingly seeing a connection 
between homes that are in seller-financed contracts and lead-poisoning 
cases.

“Unfortunately they have this contract which removes the actual owner of 
the home from the liabilities of fixing the home and requires these 
people who have no money to fix their own home,” said Dr. Jennifer 
Lowry, chief of toxicology in the pediatrics unit of Children’s Mercy 
Hospital in Kansas City.

Dr. Lowry said she had seen an increase in patients with lead poisoning 
who live in homes bought through a seller-financed contract on both the 
Missouri and Kansas sides of the city.

“What I care about is this kid who has elevated blood levels and yet I 
can’t get anybody to fix the home,” she said.

Ms. Bennett entered into a rent-to-own contract with Vision Property 
Management of Columbia, S.C., one of the biggest players in this 
fast-growing market.

Vision failed to register the property with Baltimore housing officials 
after buying it in 2014 from Fannie Mae, the government-controlled 
mortgage finance firm. It then ignored the city’s previous building code 
violation, according to public records reviewed by The New York Times.

The details of Ms. Bennett’s situation were pieced together through 
interviews with public officials, court records and documents provided 
through public records requests to various city and state agencies. Some 
of the documents were redacted to protect the privacy of the children.

In many cases, families who had been affected by lead poisoning declined 
to comment when reached, citing concerns about reprisals.

Baltimore has fined Vision more than $11,300 for failing to register 43 
homes in the city, a requirement that applies to all landlords. State 
lead investigators visited at least two other Vision homes earlier this 
year but could not physically enter and inspect them.

A representative for Vision said that the company “does not comment on 
the specific details of matters pertaining to tenants or properties” and 
that noted the matter with Ms. Bennett had been resolved.

Vision, which was featured in a front-page article in The Times, manages 
more than 6,000 homes across the country through nearly two dozen 
limited liability companies.

When it came to fixing the lead issues in Ms. Bennett’s home, Vision did 
not respond to the city’s request in late 2015. The company has argued 
its contracts put all responsibility for repairs on its tenants.

In most cities and states, landlords are required to keep the properties 
they rent in habitable condition. Some legal experts say seller-financed 
contracts like those used by Vision may violate that requirement and 
could be unenforceable in housing court.

Baltimore, as a matter of law, requires landlords to ensure that a home 
is fit for human habitation, and building officials said that includes 
rent-to-own landlords. But homes that are leased in rent-to-own deals 
can fall through the cracks because the city has so many abandoned and 
rundown homes.

Jason Hessler, deputy assistant commissioner for Baltimore Housing, 
said, “The house was in violation at the time it was sold by Fannie Mae 
to Vision and was supposed to be unoccupied until approved by the 
building department.” But he added that unless it was obvious that 
someone had moved into a house without the department’s permission, 
building inspectors might not know.

For many poor families who want to own a house and cannot get a 
mortgage, nontraditional housing transactions like Ms. Bennett’s have 
become their only option. Some do not understand what they are signing.

Dr. Lowry says that many of the families she works with do not speak 
English and thought they were buying a house outright. She was one of 
several housing officials and doctors who discussed the problems caused 
by seller-financed deals at a recent conference on childhood lead 
poisoning in Washington.

Seller-financed deals, which include contracts for deed and rent-to-own 
leases, are loaded with risk. They lack basic consumer protections, and 
residents can be easily evicted since the title to a home is not 
transferred until the final payment is made.

The Consumer Financial Protection Bureau has begun to investigate 
whether some companies are taking advantage of consumers. State 
regulators in Wisconsin, New Mexico and New York have begun their own 
inquiries, while officials in Minnesota and Missouri have issued 
consumer alerts.

Poor families that buy or rent one of these rundown homes often find 
themselves with another problem: Because they do not technically own 
their house, they are ineligible for any state or local grants to help 
defray the cost of removing lead paint.

Kendra Harrell, 23, moved into a Vision home in Baltimore with her 
mother in 2014 on a rent-to-own contract. Ms. Harrell, who has two young 
children, estimated that she had paid more than $1,000 to repair the 
home, which still has a leaking roof.

Photo

A rowhouse at 524 Loudon Avenue was found to have lead paint. It is 
being renovated and is listed for rent. Credit Matt Roth for The New 
York Times
“Pretty much everything is on me,” said Ms. Harrell, who works as a 
cashier at a local Home Depot.

Now she worries about the chipping paint on the banister in the home, 
which was built in 1915, adding that her son had tested positive for 
lead while living in another house. “I figured maybe I could try to get 
someone out to break off the paint and paint over it,” she added.

In New York State, some grants provided to residents in rural 
communities to eliminate “critical health and safety threats” from 
homes, including lead paint, specifically exclude anyone buying a home 
with a contract for deed.

A lead-safe program in Columbus, Ohio, is open only to property owners — 
again shutting out people buying homes through a contract for deed or a 
signing a rent-to-own lease.

Katarina Karac, an assistant city attorney for Columbus, recently helped 
one woman who bought a home with a contract for deed get the seller to 
apply for a lead paint removal grant. Ms. Karac said the woman, who has 
three young children, had applied at least twice to the lead-safe 
program and was rejected because she did not legally own the home.

“She was lucky enough the property owner was willing to work with her,” 
she said. “I can’t imagine someone in her position ordering a lead test, 
and if lead is found, asserting a claim against the owner.”

In Michigan last month, a special lead-poisoning task force set up by 
the governor after the water crisis in Flint recommended a one-time lead 
inspection, the results of which property owners must disclose to buyers 
and renters. The proposal stipulated that the requirement could not be 
“waived in the event of a sale through land contract.”

In Ms. Bennett’s case, Baltimore’s health department sued a limited 
liability company tied to Vision in December 2015 for failing to 
promptly comply with an order to eliminate the lead paint condition in 
the home.

Many of Vision’s homes were bought cheaply from Fannie Mae and had been 
empty for years. Vision bought the house at 524 Loudon Avenue from 
Fannie for about $5,000.

Ms. Bennett, who paid a monthly rent of $440, sued Vision after learning 
the children were poisoned by lead. She declined to talk about her 
situation, citing a confidentiality provision in the settlement of her 
lawsuit. She left the house in November 2015 as part of a settlement 
with Vision.

Lead poisoning has been particularly acute in Baltimore because of its 
aging housing stock. The city has about 40,000 abandoned homes; on some 
streets the vacant, rundown homes outnumber the occupied ones.

Maryland’s environmental agency says some 1,100 children age 6 or 
younger tested positive for elevated lead levels in the city of 
Baltimore in 2015.

“This is something that everyone has an obligation to fix — certainly 
the landlord has an obligation as well,” said Dr. Leana Wen, Baltimore’s 
health commissioner.

And the company has violated rules in other cities.

In 2012, legal aid lawyers in Minnesota sued Vision on behalf of a 
couple with four children and two grandchildren, contending the company 
knowingly sold them, through a contract for deed, a home in Minneapolis 
that the city determined had a “severe” lead paint problem. Conditions 
in the home, which Vision bought from Fannie Mae, were so bad that the 
city posted a “do not occupy” warning notice on the house.

But the couple, Charles and Leona Rush, claimed they did not see any 
warning sign when they bought the house. In court papers, Vision 
disputed the Rushes’ claim. The company’s lawyers argued that “unless 
plaintiffs closed their eyes as they entered the property, they saw the 
bright green lead hazard sign.”

The lawsuit ended with a confidential settlement.

Ruth Ann Norton, who heads the Green & Healthy Homes Initiative, a 
Baltimore-based nonprofit that promotes national policies to combat 
childhood lead poisoning, says the federal government can do more to 
make sure homes with lead paint problems are not dumped onto the market. 
Fannie Mae sold some 900,000 foreclosed homes after the crisis.

Peter Bakel, a Fannie spokesman, said, “Fannie Mae has policies in place 
designed to ensure compliance with applicable laws regarding lead paint 
disclosures and remediation.”

Ms. Norton’s group is proposing that government housing agencies be 
required to eliminate dangerous lead conditions in vacant and foreclosed 
homes before putting them on the market.

“We should not allow houses to go on the market that will poison 
children,” said Ms. Norton, whose organization provided assistance to 
Ms. Bennett.

Vision has since washed its hands of the Loudon Avenue home. The company 
settled with Baltimore health officials by paying a $10,000 fine in 
October and sold the house last summer.

The house is being renovated, but a sign posted in the dirt yard 
advertised the house as “FOR RENT!!!”

Susan C. Beachy contributed reporting.


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