Welcome back to our first post of AUGUST !
WOW...you can almost feel the snow that's on it's way in the next few months.
9 years of living and breathing Rent to Own, and can I share this with you? I have never seen such publicity regarding Rent to Own as I have seen over the past few months ! Most of it is good and promising, but there are always vultures and bad apples out there looking to take advantage of buyers and/or sellers in desperate situations.
Let us take a look at the "BAD" (and the "Ugly").
In a recent Press Release on Media-newswire.com, titled, "A Georgia man was sentenced to nearly six years in prison for his role in a mortgage fraud conspiracy", as the story says, a person from Georgia was allegedly involved in a scam involving "dozens of properties and $7.5 million in loans", as per Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The scam went as follows, per the article: the individual, "informed the straw buyers/investors that after he purchased these properties in their names, he would enter into a “rent-to-own” agreement with one of the individuals from the community with poor credit in order to help that individual improve his/her credit score by renting the property for a year.", and additionally, he "represented to the straw buyers/investors that he would collect the rent from these individuals as tenants in the properties, pay the mortgages and taxes for the properties, and maintain the properties for the straw buyers/investors for approximately a year, at the end of which time he would sell the property to the tenant after his/her credit score improved and the property would be transferred out of the straw buyer’s/investor’s name, according to court documents."
Unfortunately, he "did not assist any individuals with poor credit, nor did he enter into any “rent-to-own” agreements.", but instead, he "conspired with" loan officers, "to prepare and submit fraudulent mortgage loan applications to various mortgage lenders knowing that they contained false information with regard to the straw buyers/investors in order to secure mortgage loans on the 48 properties, according to court documents.". Ultimately, he was sentenced to 69 months in prison.
Now, that is the only negative story on my radar the past few months, aside from a Foreclosure Scam we discussed in a previous Blog Post ("Foreclosure Scam Alert Based On Phony Deeds")
For the most part, Rent to Own has been represented in the Media as an opportunity for buyers, sellers, as well as entire Housing Markets and Nations to rebuild and prosper. With that, let us examine these positive stories (the "GOOD").
Rent to Own has always been an important strategy to pull buyers with less than perfect credit into the market, as well as sellers who are stuck in a home or multiple homes. A recent story in the Milwaukee Journal Sentinel titled, "Condo Living: Income Property", discussed a company in Milwaukee (Milwaukee Apartment Finders) that "offers its clients a rent-to-own option, which allows tenants who make an additional down payment when they sign the lease to apply a percentage of their rent to the purchase price of the condo unit.", which is a Rent to Own agreement. The story adds that at the end of the lease, "which is typically 12 months, tenants can opt to buy the unit or forfeit the down payment to the condo owner."
Additionally, in a story by Luis Hernandez for the Visalia Times ("47-unit housing project OK'd by Tulare Planning Commission"), the story discusses the approval by the "Tulare Planning Commission" of a design for Aspen Court, "a 47-unit affordable-housing project in east Tulare — the first such development to receive city approval in several years." In the story, Consultant Tim Sciacqua (representing Kaweah Management), is quoted as saying that "Tule Vista, a rent-to-own single family housing project on E Street north of Bardsley Avenue, has 10 units ready to be rented out. The second project, Trails West at Cross Avenue and West Street, is about 10 months away from completion. Framing for the houses is up."
The good stretches outside of our borders, as well.
In the United Arab Emirates (UAE), two recent stories discussed Rent to Own in the Oil-rich nation. "The introduction of rent-to-own schemes may boost demand" for projects in Abu Dhabi, Jones Lang LaSalle said in a report released this week, noting that it expected other developers to follow the Sorouh model". This quote comes from the story written for the National.ae, titled, "1000 homes to boost sluggish sales market", which offers hope in boosting the market in that country. In a second story for the UAE, written by Parag Deulgaonkar for Emirates247.com ("Rents in older Abu Dhabi buildings fall 15% in Q2. Second half to see higher handover; prices not to recover before 2012"), the story says that, "The introduction of rent-to-own schemes may boost demand, but only a limited number of developers offering this option.". Once again, a beacon of hope for increasing demand and stoking the market.
Buying a Home, Selling a Home, Renting a Home, OR Renting-to-Own a Home. These all require careful review and due-diligence before signing on the dotted line. Do not rush your decision, regardless of how dire your situation, as you could find yourself worse-off by ten-fold. Consult your attorney, title company, etc. These are major life decisions...
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Have a Great Week, and Happy Rent-to-Owning !
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TAGS: #renttoown #titlecompany #buyinghome #sellinghome #downpayment #UAE #mortgagefraud