A federal regulator signaled that it would take a tougher stance with seller-financed home sales, saying that they were subject to many of the same consumer protections as a home bought with a more traditional mortgage, the New York Times reported. The Consumer Financial Protection Bureau (CFPB) released an advisory opinion that put sellers on notice that it would not tolerate the predatory practices that have come to dominate the so-called contract for deed market. These seller-backed sales have become popular in poor neighborhoods with rundown single-family homes, where mortgages are hard to come by. The CFPB made clear that contract-for-deed sales were subject to federal truth in lending laws that required sellers to first assess a person’s ability to buy a home as well as provide full disclosure of the risks and hidden costs associated with these deals. “The government is taking action to ensure that these products do not turn the dream of homeownership into a nightmare,” CFPB Director Rohit Chopra.The regulator also released a research report documenting the market’s abusive practices. Among them, a buyer can be evicted for missing a single monthly payment and builds up no equity in the home. Contract-for-deed sellers have targeted ethnic and religious communities. (Subscription required to view article.)