It's more than that, though. Here's how the article parses out: 1) Harbor Homes buys up distressed properties. They then loan-shark these houses like Rent-A-Center: you don't own it, but you live in it, and you have no legal claim to it, but if you pay the purchase price (which is whatever they can make you agree to) you own it. Meanwhile if you miss a payment they can kick your ass to the curb and meanwhile, you're paying four times the going mortgage rate (which is compounding, by the way - type "mortgage calculator" into Google and play around with those rates) and meanwhile, if they sell the house you don't have any sort of recourse to whoever buys it. But wait, there's more. 2) There's no insurance on these houses and there's no traditional protections between buyer and seller because it isn't, strictly speaking, a real estate deal. And these are shit houses. Of the 50 Harbour owned in Akron, twelve have been or are being demolished. That's about a 25% condemnation rate. So these are poor people getting ass-raped to live in squalor that they can't afford to fix... until the authorities show up and say "it's unsafe to live here" and they're out everything. No equity, no nothing. But wait, there's more. 3) The houses being "sold" are "sold" under a contract that requires the tenant to execute all necessary repairs within four months and pay all property taxes. As these are FNMA foreclosures that went for pennies on the dollar, and as they are being sold for 3-4x the purchase price, they're basically honeytraps for the indigent sold on the idea of Living The American Dream. We're talking people who can't scrape up $8k cash to buy a moneypit (not that they'd ever be allowed to; these properties were sold hundreds at a time) now paying 10% interest for 30 years so they can buy that same moneypit for $280/mo not including property taxes not including repairs with the threat of eviction hanging over them if they so much as miss a single payment and if they don't pull it off, either the company evicts them or the City bulldozes their house. But wait, there's more. 4) These utter shit houses, of which Harbour owned 6700 or so, are being sold. That's what this article is about - the fact that Harbour is offloading its non-performing assets to greater fools looking to catch a knife. Among those greater fools are "individual investors" (suckers), Shelter Growth Capital Partners (ex-Goldamn vultures), Battery Point Financial (ex-Goldamn vultures) and New York Mortgage Trust (some of the guys that brought you mortgage-backed securities in the first place). What do they have to say? He says the company now uses its own loan-servicing firm to manage the homes and contracts it bought from Harbour, which has partnered with National Asset Advisors, a firm that operates out of a partly empty strip mall on the outskirts of Columbia, S.C. "We're going to loan shark even harder." _________________________________________________ What the article is saying, between the lines, is that 7,000 houses that were foreclosed during the housing crisis were bought up by a shady-ass loan shark from Dallas who proceeded to rape poor people with promises of the American Dream. Now, 7 years later, the bloom is off the rose and that private loan shark is selling off chunks of his "portfolio" to large, institutional investors. Which means two things: (A) he wants the cash now because the writing is on the wall (B) the same shitheads that caused the housing collapse last time through vicious derivatives and predatory lending are at it again. 6,700 homes. “We look at it as a loan, not as an opportunity to repossess,” Mr. Mumma said, with respect to contracts for deeds and homes bought from Harbour.
