The president and CEO of HomeVestors of America announced Tuesday that he will step down this summer, after an investigation by ProPublica found some of the company’s homebuying franchises had deceived sellers and targeted people in vulnerable situations.
In a letter announcing his departure to owners of “We Buy Ugly Houses” franchises, David Hicks said retirement “has been on the horizon for some time,” but he added that “recent press” coverage had taken a “personal toll on me.”
Hicks will be replaced by Larry Goodman, the company’s chief operating officer, on Aug. 1.
“I know Larry will continue the tradition of ensuring that HomeVestors conducts all business with honor and excellence in giving homeowners an option for difficult-to-sell properties,” Hicks wrote.
“He is ready and it is time for me to spend more time focusing on my family and my health,” he added.
Hicks did not respond to a request for comment, and the HomeVestors spokesperson did not immediately respond to follow-up questions after sharing Hicks’ letter with ProPublica.
Hicks, who became co-president in 2009 and president in 2017, oversaw a period of tremendous growth at the company, which bills itself as the largest cash homebuyer in the country. The number of franchisees has increased from about 165 in 2009 to nearly 1,150. The company was also bought and sold multiple times during Hicks’ tenure. It is now owned by Bayview Asset Management, which acquired HomeVestors in 2022.
In previous interviews and in his retirement letter, Hicks has said he believes HomeVestors helps communities by purchasing difficult-to-sell properties and returning them to the market in an improved condition. “As CEO of HomeVestors, I have witnessed firsthand how we have been able to make a direct impact on people and communities in which we operate. It is this feeling of helping others that has kept me in this business for nearly 20 years,” he said in his letter.
ProPublica’s reporting, however, found HomeVestors focused its advertising campaigns on people in vulnerable situations and taught franchise owners how to “find the pain” of a homeowner in order to buy houses for rock-bottom prices. In some cases, franchisees targeted elderly homeowners who did not understand the contracts they signed. Others were in such dire financial situations that they became homeless after selling to a HomeVestors franchise.
In a 2020 interview, Hicks said houses targeted by his company smell so bad flippers want to take a shower after visiting them.
“That cat piss smell, you know what that smell is?” he said with a chuckle. “That’s money.”
In his retirement letter, Hicks said ProPublica’s reporting “mischaracterized our business,” drew “hurtful conclusions” and reflected a “miniscule portion of our transactions.”
But in a Zoom meeting before the story was published, he told franchise owners he also believed ProPublica’s investigation would “make us a better company.” He added that HomeVestors would change some practices in response to the reporting, while laying out a plan to “bury” the story.
A HomeVestors’ spokesperson said ProPublica’s investigation referenced a fraction of the company’s transactions. She touted an internally calculated 96% customer satisfaction rating. She also said that predatory behavior identified by ProPublica isn’t taught or tolerated and that “lying is against our code of ethics and our culture.”
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Since the story’s publication, two U.S. senators and the head of the Consumer Financial Protection Bureau have called for more scrutiny of HomeVestors and companies like it. The HomeVestors spokesperson said the company is “committed to ensuring a fair and equitable homeowner customer experience” and welcomes policies that protect homeowners.
“Generally, when a CEO steps down, it opens the company up to self-reflection,” Evan Goldman, partner and co-chair of the franchise law group at the law firm Greenspoon Marder, said in an email. “Here, hopefully, the necessary parties will see the harm that HV has inflicted upon its franchisees and seek to right the ship for the future. More so, it’s my hope that the future generation of franchisees are in a better position — financially and otherwise — as a result of this change of leadership.”
