Lansing, MI - Michigan Attorney General Dana Nessel announced that her department has sent a notice of intended action to EasyKnock, Inc. (EasyKnock), ordering the sale-leaseback company to cease and desist from engaging in unlawful business practices.
The Department alleges the company offers “Sell & Stay” transactions, targeting financially distressed homeowners with low credit and high home equity in an effort to strip them of their home equity and homes.
In the transaction, homeowners sell their homes to EasyKnock and remain in their homes as tenants under a lease agreement with the company for up to five years. While EasyKnock represents that homeowners will receive 100 percent of their home’s value, the Department alleges that homeowners will receive only a fraction of that value in cash after deductions are made for processing fees, closing costs, and repair holdbacks.
Homeowners have the option to repurchase the home from EasyKnock, but this will likely require access to traditional financing that EasyKnock consumers typically lack. Repurchasing the home is made more difficult by annual increases in the monthly rent and repurchase price. Ultimately, if the homeowner cannot repurchase their home, it will be sold to a third party. EasyKnock recoups their initial investment through the second sale of the home and profits from processing fees, option fees, and rent collected during the time of the agreement.
“Bad actors often take advantage of customers in vulnerable or even dire financial situations, with hidden fees and confusing contracts,” Nessel said. “Homeowners should be sure they understand any financial agreement they are entering before they sign on the dotted line, and remember that if a deal seems too good to be true, it probably is. My department will continue to investigate businesses that use deceptive tactics to exploit consumers in crisis.”
The Department has also received information that EasyKnock has made misrepresentations or misleading statements to pressure homeowners into transactions, caused confusion about escrow fund disbursements, and failed to make necessary home repairs in a timely manner.
See: Notice of intended action (PDF)
Consumers are encouraged to place complaints directly with the Consumer Protection Team.
Consumer Protection Team
P.O. Box 30213
Lansing, MI 48909
517-335-7599
Fax: 517-241-3771
Toll-free: 877-765-8388
Online complaint form