Real eState

Minnesota Attorney General Opens Investigation Into Controversial Contract-for-Deed Real Estate Practices – ProPublica

Published

11 months ago

October 24, 2023

The Minnesota attorney general’s office is investigating potentially exploitative real estate transactions that have targeted Somali and Hispanic immigrant homebuyers in the state.

The attorney general’s action follows a report by ProPublica and Sahan Journal last year that revealed how contracts for deed — an alternative home sale agreement made directly between a seller and a buyer — can lock purchasers into inflated prices and unfavorable terms, and sometimes lead to eviction and the loss of their life savings.

“We have received a high number of complaints about predatory lending practices,” Mark Iris, an assistant attorney general in the office’s civil rights division, said in a statement. “Our office is concerned with the potential for abusive lending tactics that extract wealth from already impoverished communities.”

The Sahan Journal-ProPublica investigation identified a rising market in and around the Twin Cities for contract-for-deed sales, particularly in the Somali community. Many buyers in the East African Muslim community avoid paying or profiting from interest because of their religious principles. Investors have been offering them contracts for deed as an “interest free” way to purchase a house and sidestep a traditional bank loan.

But several Somali homeowners said they purchased homes without understanding their contracts, which included huge down payments and balloon payments, some of which soar into the hundreds of thousands of dollars. The homeowners said they had been misled, and they told reporters they feared having to walk away from their homes and the money they’d invested.

Contract-for-deed home sales lack many of the consumer protections of a bank-backed mortgage loan. Homes can be sold for tens of thousands of dollars above their current market price, which makes them difficult to resell or refinance. If the purchaser misses a payment, the seller has the power to evict in as little as 60 days.

Based on the reporting, Sen. Tina Smith, D-Minn., convened a Senate subcommittee hearing in July on the issue, characterizing the contracts as “designed to fail.” She and other senators called for more consumer protections.

Home sellers and investors who use contracts for deed say that they provide a needed, alternative pathway to homeownership for some buyers, and that, when properly used, the transaction is a safe financial instrument. They deny abusive practices.

While contracts for deed are legal, sellers can run afoul of the law by charging excessive interest rates, targeting minority groups with unfair contract terms or using deceptive tactics to lure buyers. The attorney general’s office declined to say what, specifically, officials are investigating. In addition to complaints from the Somali community, Iris said, the attorney general’s office has received a large number of reports of questionable practices being used within the Hispanic community.

Mohamed Goni, executive director of the Central Minnesota Community Empowerment Organization, said he has heard stories about allegedly deceptive tactics used by some contract sellers. Goni’s organization is a nonprofit serving the Somali community in St. Cloud, about an hour northwest of the Twin Cities.

“It’s a way of robbing or putting people into more poverty,” he said. “In central Minnesota specifically there’s a huge, huge housing problem, so it’s really encouraging to see the AG stepping in and doing an investigation.”

Stories about problematic contracts-for-deed practices have been around for years, said Jessica Aliaga-Froelke, CEO of Hispanic Solutions Group in Bloomington. Several Hispanic clients told her they bought homes using a contract for deed because they had bad credit, could not get traditional mortgages or did not have Social Security numbers.

Aliaga-Froelke said the buyers were led to believe that after making huge cash payments for a period of time, they could refinance their loans at a later date.

“They are told, ‘Here, you can have your house,’ but technically they don’t know what they’re signing,” she said. Contract-for-deed sellers “know these people will never be able to refinance with a bank.”

Roxanny Armendariz, a financial counselor with Neighborhood Development Alliance in St. Paul who also works primarily with the Hispanic community, said she hopes the attorney general looks into the role that real estate agents play in pushing buyers toward contracts they can’t afford. Real estate agents sometimes connect homebuyers who don’t qualify for a bank loan with investors who do contract-for-deed sales in bulk. The investor purchases the home through their business or limited liability company, then resells it to the buyer at a price markup.

“They do want to hold these LLCs responsible, but what about the realtors involved? That is the piece that needs to be called out,” she said.

The attorney general’s office declined to provide further details about its investigation. The office said anyone wishing to submit a complaint about contracts for deed can fill out its Tenant Report Form online, or call 651-296-3353 or 800-657-3787.

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Real eState

Two Quebec real estate brokers suspended for using fake bids to drive up prices

Published

4 days ago

September 11, 2024

Anne Joseph

MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.

Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.

Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.

She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.

The two brokers were suspended in May 2023 after La Presse published an article about their practices.

One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.

This report by The Canadian Press was first published Sept. 11, 2024.

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Montreal home sales, prices rise in August: real estate board

Published

1 week ago

September 6, 2024

Anne Joseph

MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.

The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.

The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.

The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.

QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.

Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.

This report by The Canadian Press was first published Sept. 6, 2024.

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Canada’s Best Cities for Renters in 2024: A Comprehensive Analysis

Published

2 months ago

July 24, 2024

Harry Miller

In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.

Here are the top 10 cities that emerged as the best for renters in 2024:

St. John’s, NL

St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.

Sherbrooke, QC

Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.

Québec City, QC

Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.

Trois-Rivières, QC

Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.

Saguenay, QC

Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.

Granby, QC

Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.

Fredericton, NB

Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.

Saint John, NB

Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.

Saint-Hyacinthe, QC

Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.

Lévis, QC

Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.

This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.

Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.

Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.

For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.

While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.