African-Americans Decimated from their Own Neighborhoods
A House You Can Buy, But Never Own by Alana Semuels / The Atlantic, April 10, 2018
African Americans in the same neighborhoods decimated by subprime lending are now being targeted with new predatory loan offerings, a lawsuit argues. Black tenants are offered a “contract for deed,” a type of transaction that was rampant in the 1950s and 1960s before African Americans had access to avenues of conventional lending.
In a contract for deed, the buyer purchases an agreement for the deed, rather than buying the deed itself. The tenant has to fulfill the conditions of the agreement in order to get the deed eventually, conditions that usually include making a series of timely payments over decades, paying for home repairs and general maintenance of the home, and paying taxes and insurance on the property. If he misses one payment, thus violating the agreement, he can be evicted, losing all the equity he put into the home.