Get a Free Quote Now

The Predatory Land Contract Crisis in Michigan

Michigan has the highest volume of land contract transactions in the entire country, according to the Pew Charitable Trusts. That distinction comes with a serious downside: Michigan has also been one of the most heavily targeted states for predatory land contract schemes, and it remains one of the least protected.

To understand how Michigan got here, you need to go back to 2008. When the housing market crashed and banks stopped lending to lower-income buyers, land contracts became the primary alternative path to homeownership in cities like Detroit, Flint, Saginaw, and Grand Rapids. Legitimate land contracts served a real purpose. But the lack of regulation in Michigan created a vacuum that large investment companies moved to fill.

Harbour Portfolio Advisors, operating out of Dallas, Texas, bought thousands of distressed and foreclosed homes from Fannie Mae's bulk sale program -- often paying around $8,000 per property. They turned around and sold these homes via land contracts at prices four to five times what they paid, with interest rates near 10%. The properties were in terrible condition. Roofs leaking, plumbing shot, electrical systems unsafe. Homes that no bank would finance because they could not pass an inspection.

Michigan was a perfect target for this operation because of two critical gaps in state law: there is no requirement to record a land contract, and there is no habitability requirement for properties sold via land contract. That meant a company could sell an uninhabitable house through a land contract, never record the transaction, collect payments for months or years while the buyer poured money into repairs, and then forfeit the contract the moment the buyer fell behind. No public record, no habitability standard, no paper trail. The buyer lost the house and every dollar they put into it.

The Scale of the Problem

In February 2016, The New York Times published "Market for Fixer-Uppers Traps Low-Income Buyers" by Matthew Goldstein and Alexandra Stevenson, exposing how Harbour Portfolio and similar companies were operating across the Rust Belt. The investigation found that 93% of Harbour's properties were located in census blocks that were at least 60% nonwhite. Michigan -- particularly Detroit and its surrounding metro area -- was one of the epicenters of this activity.

The reporting triggered federal action. The Consumer Financial Protection Bureau (CFPB) opened an investigation and ultimately sued Harbour Portfolio. Fannie Mae terminated its bulk sale agreements with another major operator, Vision Property Management, after the extent of the abuse became public.

Michigan's Regulatory Gap

Here is what makes Michigan different from its neighbors: reform efforts have gone nowhere. Indiana at least saw HB 1495 pass the House 82-14 in 2019 before the Senate killed it. Ohio has ORC 5313 requiring foreclosure after five years or 20% paid. Illinois passed the Installment Sales Contract Act in 2018. Minnesota enacted comprehensive reform in 2024.

Michigan has passed nothing. There is still no recording requirement for land contracts. There is still no habitability standard. There is no statutory threshold that triggers foreclosure protections for the buyer. Multiple reform efforts have been introduced in the Michigan legislature, but as of 2026, none have become law. Michigan remains the highest-volume land contract state in the country with some of the weakest consumer protections.

The only meaningful federal development was the CFPB's August 2024 advisory opinion confirming that the Truth in Lending Act and Regulation Z apply to land contract transactions. This subjects sellers to ability-to-repay requirements and mandatory disclosures at the federal level -- protections that Michigan state law has failed to provide.

What This Means for Michigan Land Contract Holders

If you hold a land contract on Michigan property, the regulatory landscape is shifting around you even if Lansing has not acted. The federal TILA requirements apply regardless of state law. The national trend is toward treating land contracts like mortgages, with foreclosure requirements, mandatory disclosures, and buyer protections that did not exist ten years ago. Future Michigan legislation could add state-level requirements at any time.

The combination of high volume, weak state regulation, and increasing federal oversight makes Michigan land contracts uniquely complex to manage. This is one of the primary reasons Michigan land contract holders sell to companies like Amerinote Xchange -- to convert a legally complicated receivable into a clean lump sum. We understand Michigan's land contract market better than most, and we price accordingly.