Fannie Mae to stop selling properties to company using rent-to-own strategy

Fannie Mae, the mortgage finance firm controlled by the federal government, has stopped selling properties to a company engaging in controversial rent-to-own practices, the New York Times reported.

Vision Property Management LLC, which has 137 properties listed in Michigan — about seven in Detroit — has been using a business model popular since the financial crisis: The company buys cheap foreclosed homes and sells them to people who can’t afford a traditional mortgage but who want to become homeowners.

The homes are rented out with the promise of ownership sometime down the line — but renters are often stuck will back debt, steep upkeep costs and unfulfilled expectations, as Bridge Magazine recently reported. Critics and activists have called the practice a tool to exploit low-income homeowners.

Fannie Mae ended property sales to Vision Property Management after it conducted a review of the South Carolina-based company’s rent-to-own practices, the New York Times reported. The mortgage finance firm said it will restrict future sales of foreclosed homes to companies using seller financing practices that hurt renters and buyers, like rent-to-own and other payment agreements based on monthly installments, according to the New York Times.

Fannie Mae’s new policy has the potential to stymie businesses that use rent-to-own and similar models. Thousands of foreclosed homes have already been sold to Vision Property Management and similar companies, the article said.


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