[The “We Buy Ugly Houses” company held a virtual meeting for
its franchises to outline a plan to “minimize visibility” of our
investigation. ]
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HOMEVESTORS PRAISED PROPUBLICA’S REPORTING, THEN TRIED TO “BURY
IT”  
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Anjeanette Damon, Byard Duncan and Mollie Simon
May 11, 2023
ProPublica
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_ The “We Buy Ugly Houses” company held a virtual meeting for its
franchises to outline a plan to “minimize visibility” of our
investigation. _

A HomeVestors billboard in Asheville, North Carolina,

 

On April 18, HomeVestors of America executives held a virtual meeting
for its nearly 1,150 franchisees. The purpose: Alert local “We Buy
Ugly Houses” operations about a forthcoming ProPublica investigation
into their business tactics.

“It is not going to be flattering for us,” HomeVestors CEO David
Hicks warned.
 

Our reporting
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HomeVestors franchisees who used deception and targeted the elderly,
infirm and those so close to poverty that they feared homelessness
would be a consequence of selling. The franchisees were trained by
HomeVestors to look for signs of desperation and pounce on so-called
distressed sellers. Many used legal tactics, described as predatory by
five experts, to trap sellers in below-market deals.

A HomeVestors spokesperson said in a statement that ProPublica’s
reporting examined a small fraction of the more than 71,400 homes
bought by its franchises since 2016. "We do not discriminate or target
our advertising to any specific demographic groups based on age, race,
or socio-economic status,” the company said. It has removed several
franchises and is investigating some cases identified by ProPublica to
“determine appropriate action.”

ProPublica is a nonprofit newsroom that investigates abuses of power.
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soon as they’re published.

After we first contacted the company in early March, a former FBI
spokesperson who specializes in “crisis and special situations”
and “reputation management” began answering questions on their
behalf.

Hicks, through this spokesperson, declined requests for interviews.
But during the virtual meeting — which ProPublica obtained a
recording of — the CEO alternated between accusing the news
organization of writing “attack articles” and praising the rigor
of our investigation.

“It’s amazing what they have brought up,” he said.

THE UGLY TRUTH BEHIND “WE BUY UGLY HOUSES”
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In a slide titled “Public Relations,” Hicks outlined
HomeVestors’ plan to drown out ProPublica’s story with
“strategic ad buys on social and web pages” and “SEO content to
minimize visibility” of the article.

He instructed franchisees not to click on ProPublica’s story link;
doing so, he warned, might improve its internet search ranking.

“Our goal is to bury it,” he said.

The company did not respond to a ProPublica question about executives
telling franchisees that they want to bury the story. But in a
statement, HomeVestors wrote, “As a company, we embrace any
opportunity to improve customer service and satisfaction. We used the
meeting to reinforce our code of conduct and company tenets that
emphasize the importance of doing the right thing for our sellers and
our communities.”

During the same webinar, Hicks and other senior leaders announced new
policies to end the very practices ProPublica’s investigation
brought to light.

On April 11, HomeVestors updated its “Systems and Standards” to
forbid franchises from clouding sellers’ titles, a maneuver that
makes it difficult for homeowners to back out of a deal. The company
discouraged franchisees from suing sellers for breach of contract. And
it reiterated that buyers who deal with seniors should always involve
family, attorneys or other guardians in the transaction.

Some franchise owners on the call pushed back on the changes, claiming
they could hurt business. But HomeVestors general counsel Anthony
Lowenberg was unequivocal: Those who regularly sue to enforce the sale
of homes are “putting the entire system at risk,” he said.

“The juice is not worth the squeeze,” Hicks added, repeating a
comment from a franchise owner in the call’s chat.

Maren Kasper, managing director at Bayview Asset Management, the
investment management firm that bought HomeVestors in 2022, also spoke
during the virtual meeting. Kasper said that ProPublica had uncovered
two cases of improper behavior that HomeVestors had not known about.
“Those franchises have since received default letters,” she said,
referring to a formal notice that they are not in compliance with
company policies.

In the course of our reporting, we sent the company questions that
detailed our findings point by point. We issued similar letters to
each franchise mentioned in the story. In all cases, we allowed ample
time to respond.

During the webinar, Kasper acknowledged the depth and thoroughness of
our investigation.

“They have scoured every corner of the internet,” she said.
“They’ve done, you know, good reporting, I would say.” She
predicted other inquiries might follow. “If the Department of
Justice came knocking, and needed us to verify every answer that we
provided to this reporter, we have all the data and materials to do
so,” she said.

“This is going to make us a better company,” Hicks concluded.
“Because overall, we're going to change some of our practices, and
make sure we change our Systems and Standards to make sure that we
have our franchise doing the right things.”

A few days after the webinar, HomeVestors sent its franchises an email
unveiling a webpage to address and counter ProPublica’s story. Among
the offerings: a copy of its corporate response, a list of talking
points and the number for a “rapid response media hotline.” When a
ProPublica reporter called the hotline, a company representative
declined to answer questions or provide comment.

The email, signed by Hicks and HomeVestors COO Larry Goodman, also
contained a warning for franchisees:

“Don’t get baited into arguments or ‘off the record’
conversations.”

_Anjeanette Damon
[[link removed]] is a reporter at
ProPublica._

* _ @AnjeanetteDamon [[link removed]]_
* _ 775-303-8857
[tel:775-303-8857?utm_source=xxxxxx-general&utm_medium=email]_
* _ Signal: 775-303-8857
[[link removed]]_

_Byard Duncan [[link removed]] is an
Engagement Reporter at ProPublica._

_Mollie Simon [[link removed]] is a
research reporter at ProPublica._

* _ [email protected]
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* _ @mrsimon22 [[link removed]]_

_Help ProPublica Investigate “We Buy Houses” Practices. If
you’ve had experience with a company or buyer promising fast cash
for homes, our reporting team wants to hear about it._

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