Attorney General Maura Healey’s office agreed to settle its lawsuit against two real estate companies for engaging in illegal “lease-to-own” practices targeting low-income Massachusetts residents.
Under the terms of the agreement, the companies are required to pay $60,000 restitution and can not purchase additional properties, originate new mortgages, or do business in Massachusetts.
The consent judgement alleges that Angelfund, Inc. and DTH-REO, Inc., both owned by David Buttross, purchased distressed, previously foreclosed properties across Massachusetts and leased them to vulnerable consumers under “lease-to-own” or “contract for deed” arrangements. Most of the properties had sanitary code violations. Some were deemed unfit for habitation and condemned.
According to the AG’s Office, the companies typically sought out prospective buyers with low income or poor credit. Properties were located in Worcester, Fitchburg, Avon, Charlemont, Lakeville, North Adams, Springfield and Winchendon.
The AG’s Office alleges that, once signed onto to the leasing contracts, the costs for repairs and maintenance shifted from the landlord to the tenant, leaving tenants with the responsibility for pulling any necessary permits. Before leasing the properties, AngleFund and DTH allegedly did not disclose to tenants the severe conditions of the homes, or that some were even considered unfit.
According to the AG’s complaint, AngleFund and DTH also allowed for tenants to convert their “contract for deed” arrangements to mortgages and offered seller-financing to tenants. The companies failed to provide the proper disclosures to buyers under state and federal law and failed to perform an analysis of a borrower’s ability to pay, violating the Attorney General’s Mortgage Lender Regulations, federal regulations, as well as other Massachusetts statutes intended to protect consumers.
