Monday
November 20, 2017

Lead Poisoning Linked to Seller-Financed Deals

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Lead Poisoning Linked to Seller-Financed Deals

Lead paint in aging and poorly maintained homes remains one of the largest sources of lead poisoning, and the growth of seller-financed housing contracts may be exacerbating the problem, The New York Times reports.

Investment companies have purchased thousands of foreclosed homes across the country and offered high-interest financing or rent-to-own deals to low-income buyers. But some of the investors have not made renovations or removed lead paint in the properties — and they're passing the problems on to buyers who can't afford to fix them, the Times article notes.

Every year, about 535,000 children nationwide test positive for lead in their blood, which can cause developmental delays and brain damage. Health officials are increasingly connecting cases of lead poisoning to homes that are sold through seller financing.

"Unfortunately, they have this contract which removes the actual owner of the home from the liabilities of fixing the home and requires these people who have no money to fix their own home," Jennifer Lowry, chief of toxicology in the pediatrics unit of Children's Mercy Hospital in Kansas City, told The New York Times. Lowry says she's seen a rise in patients with lead poisoning in Missouri and Kansas, where seller-financed home sales are growing more common.

Since people who buy or rent under seller-financing deals do not technically own their house, they usually are ineligible for state or local grants that help offset the costs of removing lead paint. Most municipalities require landlords to keep their properties in habitable condition, so legal experts argue that seller-financed contracts violate that requirement if the seller does not remove lead paint.

The Consumer Financial Protection Bureau says it is investigating the issue. State regulators in Wisconsin, New Mexico, and New York have launched investigations into whether some investment companies have taken advantage of consumers who agree to seller-financing contracts. Minnesota and Missouri officials have issued consumer alerts.

Source: “Seller-Financed Deals Are Putting Poor People in Lead-Tainted Homes,” The New York Times (Dec. 26, 2016)