By Jonathan Stempel
NEW YORK (Reuters) – New York regulators on Friday reached a $3.76 million settlement with a South Carolina firm that they said engaged in predatory lending by luring vulnerable consumers into buying rundown homes financed with costly loans it provided.
Vision Property Management LLC, of Columbia, South Carolina, did not admit wrongdoing in agreeing to pay $600,000 in restitution, forgive $3.16 million in unpaid principal on 58 homes, and transfer deeds to those homes to its borrowers.
The settlement announced by New York Attorney General Letitia James and Financial Services Superintendent Linda Lacewell followed a $2.77 million settlement last August by Atalaya Capital Management LP, a New York hedge fund that the regulators said provided Vision with funding and assistance.
Lawyers for Vision who signed the settlement agreement did not immediately respond to requests for comment.
Atalaya also did not admit wrongdoing.
In a lawsuit last August in Manhattan federal court, New York accused Vision of buying severely distressed homes at cheap prices, and then selling them at inflated values to low-income consumers eager for home ownership.
Regulators said Vision targeted the disabled, the elderly and single parents, and required them to borrow at interest rates of 10% to 25%, on top of paying for repairs needed to make their homes habitable.
The alleged wrongful conduct began in 2011, according to the lawsuit.
“Vision’s illegal and deceptive practices that were targeted against New York’s most vulnerable residents will finally be put to an end,” James said in a statement.
(Reporting by Jonathan Stempel in New York; Editing by Tom Brown)
