CFPB: federal rules apply to contract-for-deed arrangements

The Consumer Financial Protection Bureau issued an advisory opinion and research report on contracts for deed, a form of home seller financing.

Background: Under contract-for-deed deals—also called land contracts, installment land contracts, land sales contracts, or bonds for deed—the seller agrees to turn over a home’s deed only after the buyer completes a series of payments.

Details: In its advisory opinion, the CFPB said contracts for deed are generally credit that is offered by a creditor under the Truth in Lending Act, so most are considered residential mortgage transactions under Regulation Z.