EasyKnock, a real estate company offering controversial sale-leaseback deals to financially strapped homeowners, announced abruptly on Thursday that it is going out of business.
"After many years of serving consumers, EasyKnock has closed its doors," reads a post on the company's website. "We are deeply grateful for the trust placed in us to be part of the financial journey of so many."
EasyKnock promises to help people "unlock" the equity in their homes by buying the property from them and then letting them remain in the home as a renter. This type of real estate transaction, known as a sale-leaseback, focuses on homeowners who struggle to get traditional loans due to bad credit or insufficient income.
An NPR investigation in June, citing court records obtained from lawsuits against the company, found that the deals can cost homeowners tens of thousands of dollars in equity, and that customers rarely buy back their homes as the deals allow. Some people were even evicted from homes they once owned. EasyKnock has said its deals have helped hundreds of people improve their finances.
The company faces over two dozen lawsuits around the country and several investigations by state attorneys general. In May, the Michigan attorney general sent EasyKnock a cease and desist letter calling on the company to end certain "unfair and deceptive trade practices." EasyKnock denies any liability in these lawsuits and investigations and says it is cooperating with attorneys general.
In October, the Federal Trade Commission issued a consumer alert about the "risky business" of sale-leasebacks.
"The ads make these agreements — called sale-leasebacks — sound like a simple and risk-free way to get cash upfront and stay in your home," reads the alert. "But the truth is these agreements are far from risk-free."
Neither the statement on EasyKnock's website, nor notices sent to current clients, explained the cause of the company's sudden closure. EasyKnock did not respond to NPR's request for comment.
The news came as a shock to Randee Noggle, who sold her house in Michigan to EasyKnock in April 2023. She had hoped that it would help stabilize her family's finances, which took a hit during the pandemic. Instead, she said it made things worse. Noggle is still living in the home as a tenant, along with her husband and their son. She filed a lawsuit against EasyKnock earlier this year.
"It came as a surprise. It's just like, well, okay, now what?" Noggle said.
The notification she received on Thursday morning offered little detail. It said management of the property will be handled by a company called NESE Property Management. NESE's website, which was purchased Nov. 26, is still under construction.
Noggle does have some protection because of her lawsuit against EasyKnock. The company agreed not to initiate eviction proceedings while the case is ongoing, according to court documents reviewed by NPR. Noggle and her husband agreed to make monthly rent payments of nearly $400 into an escrow account.
"Everything's a little bit of a question mark right now, so we've got to wait and see what happens," said Robin Wagner, who represents Noggle and several other Michigan homeowners in their lawsuits against EasyKnock.
EasyKnock markets itself as the nation's first technology-enabled residential sale-leaseback company. The types of transactions it offers have been facing a heated debate in the courts over whether they are subject to mortgage regulations that protect homeowners. EasyKnock argues that its sale-leaseback deals are not loans, and therefore those laws don't apply.
The lawsuits against the company, the state attorneys general investigations and the company's sudden closure call into question the viability of these residential sale-leaseback deals, said Stacey Tutt, a senior staff attorney at the National Housing Law Project.
"I think it's a lesson to be learned by any other company that is operating in this space," Tutt said. "It should be something that the industry is paying very close attention to because it is an indication that there are flaws within their model that open them up to these claims of unfair practices."
NPR's investigation found that people rarely repurchase their homes. Even after EasyKnock's closure, it's still unlikely people like Noggle will be able to buy their houses back, said Tutt, who reviewed several of EasyKnock's contracts at the request of NPR.
"It's a buy-back provision that is likely unaffordable for the homeowner to be able to pay it back. And I think it would be very unlikely that a purchaser of those contracts then would be able to modify them enough to make them affordable," she said. "That's where I get very concerned about their ability to stay in the homes, given the terms of the contracts themselves."
Noggle is just hoping she can stay in the home – the first house she ever purchased, bought with an inheritance left by her grandmother.
With everything so up in the air, Noggle isn't sure what she makes of the news of EasyKnock's closure.
"I'm just hoping that maybe this is like the light at the end of the tunnel," she said.
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