Vision settles New York predatory lending allegations for $3.75M
Vision Property Management has settled accusations made by New York regulators of predatory lending practices for a total of $3.75 million in cash and forgiven mortgage loan balances.
The Columbia, S.C.-based company sold homes it owned in New York to consumers alternating between a seller-financing model and a rent-to-own model. Since 2011, providers of seller financing were required to be licensed as mortgage lenders in New York; it was alleged that Vision did not have a license.
"Vision's illegal and deceptive practices that were targeted against New York's most vulnerable residents will finally be put to an end," said Attorney General Letitia James in a press release. "Owning a home is what millions of New Yorkers dream of, but Vision turned that dream into a nightmare. Not only are we shutting down this company's illegal New York racket, but we are securing restitution for the many victims and are ensuring 58 families have their mortgage debts wiped away."
Besides the Attorney General's office, the New York Department of Financial Services participated in the settlement agreement, which was filed in the U.S. District Court for the Southern District of New York, the same court where the parties sued Vision last August. The agreement also covers Vision's CEO, Alex Szkaradek, who is a co-defendant in the case.
"Defendants neither admit nor deny any of the allegations of the Complaint, except as specified in this Stipulated Order and Final Judgment," a copy of the settlement agreement stated.
Under the agreement, Vision will make cash payments of $600,000 to New York consumers who already moved out of homes that were owned at one point by Vision.
In addition, more than $3.15 million in unpaid mortgage principal for 58 homes will be forgiven by Vision as restitution.
The ownership of these 58 homes will be transferred — free and clear of any future payments — to Vision's current New York consumers.
Vision also must end any remaining business in New York and is permanently barred from engaging in residential real estate business in the state.
This is the second settlement in this matter. In the same month the initial action was filed, Atalaya Capital Management agreed to pay $2.4 million in consumer restitution, a civil penalty of $250,000 and additional relief of $123,800. It also agreed to co-operate with regulators. Atalaya provided financing to Vision for the property management company to then lend to consumers in 110 New York transactions between 2011 and 2017. The relationship ended after questions arose in media reports regarding Vision's business practices.
Besides not having a license, Vision allegedly charged customers interest rates between 10% and 25%, subjecting it to the state's high-cost mortgage act.