Brown Statement on CFPB Action Against Predatory “Contract for Deed” Loans

WASHINGTON, D.C. - Today, U.S. Senator Sherrod Brown (D-OH), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, issued the following statement after the Consumer Financial Protection Bureau affirmed that contract-for-deed housing sellers must comply with longstanding federal mortgage protections:

"From Akron to Youngstown, we've seen predatory investors target homebuyers with 'contract-for-deed' deals that intentionally take advantage of people. I have called on the Bureau to take action to protect families from these predatory practices," said Brown. "This action from the CFPB makes clear these shady deals violate the law and paves the way for the Bureau to hold these investors accountable."

The practice of contract for deed home financing involves the home seller holding the legal title to a property as security until full payment is completed. Many times this allows low-income home owners to fall into a "fixer-upper trap" where families are evicted at the first sign of default, and the seller pockets the profit from the improvements and the monthly payments. Brown has long advocated for low-income home buyers to be protected from contract-for-deed deals. Following a New York Times report about Akron residents who have been targeted by this practice, Brown wrote to the CFPB regarding the lack of basic consumer protections for low- and moderate-income home buyers who are being targeted by this practice.

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