Buying on contract meant that you made a down-payment to a speculator. The speculator kept the deed and only turned it over to you after you’d paid the full value of the house — a value determined by the speculator. In the meantime, you were responsible for monthly payments, keeping the house up, and taking care of any problems springing from inspection. If you missed one payment, the speculator could move to evict you and keep all the payments you’d made. Building up equity was impossible, unless — through some Herculean effort — you managed to pay off the entire contract. Very few people did this. The system was set up to keep them from doing it, and allow speculators to get rich through a cycle of evicting and flipping.
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