Today, the CFPB released a report about a form of home seller financing called “contract-for-deed” financing, under which the seller agrees to turn over a home’s deed only after the buyer completes a series of payments. The report found that such deals often involve inflated home prices, high interest rates, and balloon payments — and are often targeted at low-income people and people of faith, particularly in the Muslim community, as the loans are marketed as a way for community members to abide by the principles of their faith that prohibit paying or profiting from interest.
The accompanying advisory opinion states CFPB’s views that the Truth in Lending Act and Regulation Z apply to contract-for-deed deals.
