The Minnesota attorney general’s office has sued a home seller accused of targeting the East African Muslim community with predatory real estate practices. The lawsuit, filed Tuesday, involves Chadwick Banken and six of his companies. Authorities allege that Banken used contracts-for-deed to exploit Muslim buyers by selling homes at inflated prices on unfavorable terms.
Attorney General Keith Ellison emphasized that this case signals a warning to others engaging in similar activities, stating, “He’s not the only one, but he’s one of the worst I’ve seen.” Buyers unable to meet the terms often lose their homes and money, causing significant financial harm.
This legal action stems from a 2022 investigation by ProPublica and Sahan Journal, which highlighted the growing contracts-for-deed market in Minnesota, especially within the Somali community. Many East African Muslim buyers prefer to avoid interest due to religious beliefs. Banken allegedly leveraged this perspective to promote deals as “interest-free” while misleading buyers about contract terms.
When people can’t pay back, they’re out of their house, and they’re out of their money.
The lawsuit asserts Banken employed high home prices, significant down payments, and six-figure balloon payments to push purchasers toward default, thereby retaining property ownership. One buyer, Abdinoor Igal, shared his experience of buying a home from Banken in Lakeville, only to walk away after $170,000 in payments. He spent months living in his truck while his family went to Kenya, eagerly awaiting legal action against Banken.
The attorney general’s move aligns with efforts to revise Minnesota’s contract-for-deed law. Proposed legislative changes aim to deter practices like property “churning,” offering enhanced protections and remedies for affected buyers. Currently, these changes await approval in an omnibus bill.
The lawsuit details Banken’s extensive home sales via contracts-for-deed and the deceptive strategies employed. Banken’s business targeted buyers described as having “low credit scores” or recent financial setbacks. One tactic involved using business names for buyers in contracts to falsely frame evictions as commercial rather than residential disputes.
Additionally, contracts violated the federal Truth In Lending Act by not disclosing full home costs or balloon payments. Muslim buyers faced disproportionate pricing and obligations. Ellison criticized Banken’s misleading marketing, which portrayed the business as supportive of those excluded from traditional buying channels.
Ellison urged affected buyers to contact his office, offering potential future restitution. Igal remains hopeful for consequences but acknowledges ongoing challenges for others. He continues to struggle with rebuilding his family’s life, sharing the emotional impact on his children.