The Consumer Financial Protection Bureau, the nation’s top consumer watchdog, is stepping up an investigation into seller-financed home sales that target lower-income home buyers unable to get a traditional mortgage, the New York Times reported today. The regulatory agency disclosed yesterday that it recently ordered two major companies that offer high-interest installment contracts, called contracts for deed, to comply with a civil investigative demand for documents. The two firms, which challenged the demand for documents, are Harbour Portfolio Advisors of Dallas and National Asset Advisors of Columbia, S.C. The agency began informally looking at seller-financed homes, and specifically contracts for deed, this year. Enforcement lawyers at the agency have been investigating the prevalence of these types of transactions to determine whether they violate federal truth-in-lending laws. Harbour Portfolio bought more than 6,700 single-family homes after the financial crisis of 2008, most of them from Fannie Mae, a government-controlled mortgage finance firm, through bulk sales. Harbour paid $10,000 or less for most of the homes, which were foreclosed on during the financial crisis, and sells them “as is.” This year, Harbour began to sell off more than 600 homes with existing contracts for deeds in place to other investment firms and individual investors.
