Vision Property Management and a number of affiliates have ensnared Black prospective homebuyers in the Detroit area into predatory and discriminatory contracts that are “structured to fail” and replete with “abusive credit terms,” a proposed class action lawsuit alleges.
The 109-page lawsuit, filed on behalf of three plaintiffs by the America Civil Liberties Union Fund of Michigan, the Michigan Poverty Law Program, the NAACP Legal Defense and Educational Fund and the National Consumer Law Center, alleges Vision Property Management and its co-defendants are responsible for fueling evictions in the Detroit area, in part by requiring prospective homebuyers to take on “all of the obligations of homeownership with none of the rights.”
“Vision induced prospective homebuyers to sign its contracts based on a false promise of homeownership,” the complaint alleges, characterizing the defendant’s apparent practices as the latest chapter in a long history of housing and credit discrimination in and around the Detroit area. “In reality, Vision’s practices gave prospective homebuyers almost no chance of success.”
According to the lawsuit, Vision sells properties “in extremely poor condition” to would-be homeowners who invest thousands of dollars and countless hours into making the house habitable. Vision’s business model, the complaint states, was developed in the wake of the foreclosure crisis, when foreclosed homes were abundant and access to mortgage credit, especially around Detroit, was difficult.
In the event of a default, however, individuals who bought property from the defendant end up losing all of their investment and money paid under contract with Vision, the suit says.
“Vision advertised its financial product as a pathway to homeownership for people who have dreamed of owning a home but had been unable to do so due to their income or credit profile,” the complaint reads. “Despite this lofty marketing pitch, which promised a pathway to homeownership for those who could not get traditional mortgages, Vision’s business model was structured to make it virtually impossible for anyone to succeed in becoming a homeowner.”
Whereas a traditional homeowner mortgage entitles the holder to keep the benefit of their labors and financial investment, those who buy property through Vision “do not accrue that benefit or build any equity,” the lawsuit relays, claiming the foreclosure protections offered by a mortgage are similarly absent for those who do business with the company.
Unlike a homeowner with a mortgage, Vision homebuyers who default are “often removed through summary eviction proceedings,” which the company “frequently threatens” in the event payments are submitted late, the lawsuit alleges.
In all, Vision Property Management has misrepresented to Black prospective Detroit-area homebuyers the nature of the home-buying transaction itself, including by failing to disclose both the cost of credit in the company’s alternative financing agreement and the “significant problems” with the condition of the just-purchased home despite touting “detailed inspection reports” for each property, the complaint says.
Moreover, the lawsuit alleges Vision has intentionally targeted Black homebuyers with its “predatory scheme,” noting that the locations of the company’s properties “skew heavily” toward Black neighborhoods, “even more than would be predicted by its facially neutral practice of purchasing bulk REO properties.” The case charges this “skew” in where Vision’s properties are located is the result of “deliberate decisions to target predominantly Black neighborhoods” for the purpose of buying property.
“Its property acquisition practices in southeastern Michigan—specifically, its reliance on bulk sales of real estate owned (‘REO’) properties in predominantly Black neighborhoods in the greater Detroit area—cause Black homebuyers to be disproportionately subject to its abusive and deceptive contracts,” the plaintiffs contest.
A step further, the complaint alleges that by advertising its services primarily by placing yard signs in Black neighborhoods, Vision utilized a local approach “intended to reach almost exclusively Black homebuyers.”
“Vision targeted Black neighborhoods in order to attract Black potential homebuyers, due to their actual or perceived lack of other available options for homeownership,” the lawsuit alleges.
The case seeks relief for proposed class members—all individuals who entered into an “LOP” contract with Vision in the Detroit area from January 1, 2013 to December 31, 2019—under the federal Fair Housing Act, Equal Credit Opportunity Act, Truth in Lending Act, Real Estate Settlement Procedures Act and Michigan's Elliott-Larsen Civil Rights Act and Consumer Protection Act.
In addition to Vision Property Management, the case names as defendants VPM Holdings, LLC; FTE Networks, Inc.; US Home Rentals, LLC; Kaja Holdings, LLC; Kaja Holdings 2, LLS; MI Seven, LLC; IN Seven, LLC; RVFM 4 Series, LLC; ACM Vision V, LLC; ACP Roadmaster, LLC; ACP Nash, LLC; ACP MP Investments, LLC; DSV SPV 1, LLC; DSV SPV 2, LLC; DSV SPV 3, LLC; Boom SC; Alan Investments III, LLC; Arnosa Group LLC; Arnosa Homes LLC; Mom Haven 13; Atalaya Capital Management LP; and two individuals.
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