BOSTON (WWLP) – The Massachusetts Attorney General’s office found two for-profit real estate companies deceptively lured homebuyers into purchasing distressed properties with false promises of homeownership.
An agreement was made with real estate companies AngleFund and DTH-REO to pay $60,000 in restitution to the consumers and banned from doing business in Massachusetts after a lawsuit was filed by the Attorney General’s Office alleging a “lease-to-own” scam that unfairly and deceptively lured low-income consumers into real estate agreements for distressed homes they couldn’t afford.
The consent judgment alleges that since 2016, owner David Buttross of AngleFund and DTH-REO purchased distressed, previously foreclosed properties and rented them under “lease-to-own” or “contract for deed” arrangements. The consumers were given the option to purchase the property outright later but had little chance of being able to afford ownership of the homes.
“These companies created immense financial and emotional hardships for hopeful homebuyers in Massachusetts,” said AG Healey. “We are very pleased to secure relief for the families affected, including providing an opportunity for home ownership, and stop these companies from doing business in Massachusetts again.”
According to the AG’s Office, the companies looked for buyers with low income or poor credit. The homes had significant sanitary code violations and some were deemed unfit for habitation and had been condemned by the properties’ respective towns. The costs for repairs and maintenance shifted from the landlord to the tenant, requiring tenants to retain sole responsibility for pulling any necessary permits needed for maintaining upkeep and restoration of the property.
An investigation began in 2017 after identifying a condemned property in Avon that had been previously leased to tenants by AngleFund and DTH. The investigation revealed at least 13 properties owned by the companies in Massachusetts, including homes in Avon, Charlemont, Fitchburg, Lakeville, North Adams, Springfield, Winchendon, and Worcester.
According to the AG’s complaint, both companies failed to provide the proper disclosures to buyers under state and federal law and failed to perform an analysis of a borrower’s ability to pay, violating the Attorney General’s Mortgage Lender Regulations, federal regulations, as well as other Massachusetts statutes intended to protect consumers.
Under the terms of the settlement and court order:
- AngleFund and DTH will be required to pay $60,000 in restitution to the consumers harmed.
- AngleFund and DTH will no longer be allowed to purchase additional properties or originate new mortgages in Massachusetts.
- AngleFund and DTH are banned from doing business in the state.
Tenants are given the option of full ownership of their properties from AngleFund, and the company has agreed to pay any outstanding property taxes or fees in connection with the properties prior to the transferring of the deed.