FHFA, Fannie Mae Cease Selling REOs To Rent-To-Own Companies
Fannie Mae has recently ceased all sales of real estate owned (REO) properties to Vision Property Management – and, in fact, all other “rent-to-own” companies – after an investigation revealed that some of the homes Vision offered on a rent-to-own basis had lead paint, failing septic systems and other safety problems, even though the renters had agreed by way of their contracts to move into the homes “as is” and fix them up.
On the surface, Vision’s goal of getting lower-income people into homes they can ultimately own is enviable: Not only does the company create a path to homeownership through its rent-to-own program that otherwise might not exist, but its model also helps speed up the elimination of blight by putting renters in control of property condition.
Part of the problem lies in the fact that in most, if not all, states, it is illegal to rent a property if it isn’t safe or in good functioning condition – even if the property owner agrees by way of the lease to fix it up. Normally, if an investor buys a property from Fannie Mae that has lead paint, the investor is required to remediate the problem before renting or selling it. Under Vision’s model, however, the homes are leased “as is” and the tenants have responsibility for repairs and maintenance.
Apparently, that model is flawed because now, following an investigation, as well as a series of articles in the New York Times detailing the company’s practices, the Federal Housing Finance Agency (FHFA) and Fannie Mae have agreed to stop selling the properties to Vision and, in fact, all rent-to-own companies.
The decision is based, in part, on the results of an investigation conducted by Rep. Elijah E. Cummings, D- Md., a ranking member of the House Committee on Oversight and Government Reform, which revealed that the company had “willfully” ignored its responsibilities as owner and landlord of the properties, “endangering tenants and promoting abusive lease-to-own schemes,” according to a statement from Cummings’ office.
“Families who move into homes purchased from Fannie Mae should not have to worry about whether their children will get lead poisoning,” Cummings says in the statement. “Vision withheld documents from both Congress and Fannie Mae, so I applaud this decision to end sales to this company.”
On May 12, Cummings sent a letter urging the FHFA to restrict Vision and other “unscrupulous investors” from buying properties at bargain-basement prices and then “shirking their obligation as landlords to ensure the safety and habitability of their homes.”
Contributing to the FHFA and Fannie Mae’s decision was the fact that Vision had declined to provide certain data on its leases as part of the investigation.
In response to the situation, Fannie Mae plans to insert in its future contracts with investors a provision prohibiting the use of Fannie properties in lease-to-own schemes.
In addition, Fannie Mae will identify all investors that buy more than 25 REOs in a single year and will approach these buyers to sign memoranda of understanding requiring them to provide data about how properties they buy from Fannie are being used.
Cummings’ investigating into Vision’s “abusive practices” is the result of an article in the New York Times detailing how a family in Baltimore suffered lead poisoning after living in a home leased from Vision that had been purchased from Fannie Mae.
According to the statement from Cummings’ office, Vision purchased 3,417 REO properties from Fannie Mae between 2010 and 2014 in pool sales – and it continued to acquire properties from Fannie Mae after pool sales ended in 2014.
Assurant Adds Kevin Raney And Jerry Rowell To Its Management Team
Assurant Inc., a provider of risk management solutions, recently named Kevin Raney managing director of Assurant Valuations and Mortgage Technology, under the company’s Mortgage Solutions group.
Separately, the company recently named Jerry Rowell managing director of Assurant Field Services, also under the Mortgage Solutions group.
Raney has more than 30 years of leadership experience in the mortgage valuations sector. Most recently, he led the valuations division at Altisource as vice president, where he focused on streamlining operational processes, growing client relationships and developing overall market strategy across the division. He also previously served in a number of leadership roles at organizations including PHH Corp., First NLC Financial Services, Aames Home Loans and GMAC Mortgage.
In his new position, Raney has responsibility for operations and strategy for Assurant Valuations and Mortgage Technology, with a specific focus on the origination channel. He will be based in Indianapolis.
Rowell has more than 20 years of experience leading companies in the financial services sector, including mortgage, field service and commercial lending firms. Most recently, he led J. Rowell & Associates in providing management consulting to service-based companies, driving operational improvements and increased profitability for an extensive list of top-tier clients.
Rowell also previously worked as managing director of Lender Processing Services’ Field Services Division, where he was responsible for leading and developing operations, the management team, technology, and other aspects of the business. Through his leadership, the company realized significant growth, improved customer satisfaction and product expansion.
In his new job, Rowell will have responsibility for operations and strategy for Assurant Field Services, with a focus on advancing its position as a field services industry leader. Rowell will be based in Austin, Texas.
Safeguard Properties Announces Two Management Appointments
Sheilla Lienerth recently joined field services company Safeguard Properties as assistant vice president of client relations.
In addition, Lisa Nicholas recently joined the company as director of finance and accounting.
Prior to joining Safeguard, Lienerth held a variety of leadership roles in the areas of sales, customer engagement, and performance and business analytics. She is a trained Six Sigma Black Belt and brings a continuous improvement mind set and process discipline to all aspects of her work. Her career includes senior positions with Bridgestone’s credit division and KeyBank.
In her new role, Lienerth will lead Safeguard’s client account management and process improvement team.
Nicholas previously managed various areas of accounting, with increasing responsibility at Forest City Realty Trust, Avery Dennison and Barnes Distribution. In those capacities, she was responsible for strategic process improvement initiatives, operational efficiency, and developing standard process and internal control frameworks.
In her new role, Nicholas will manage Safeguard’s accounts receivable and loss management teams.