One of the nation’s largest banks is trying something new to help break the foreclosure stranglehold and see if they can help get homeowners out from under their mortgages and drive home prices back up.
Last week, Bank of America announced a new program called “Mortgage to Lease,” which is geared to help customers facing foreclosure by allowing them to remain in their homes – if certain conditions are met. What do you think of this program?
Participants of BofA’s pilot program, expected to affect fewer than 1,000 homeowners, will transfer property titles to the bank and forgive outstanding mortgage debt. In exchange, the former homeowners will lease their home for up to three years at or below the current market rental rate.
Across the nation, 3 million properties were in foreclosure in 2011, half of which weren’t even listed on the market yet. However, this trend might be coming to an abrupt halt sooner than we imagined.
The requirements that must be met to be a participant of the program:
• Bank of America loan
• Behind on mortgage payments by at least 60 days
• The home is “underwater”
The program is being touted as a “win-win situation for all” because homeowners don’t have to pay those high mortgage payments on top of homeowners insurance or property taxes. Meanwhile, the banks don’t have to foreclose the home, which helps maintain property value, and allows money to continue to be made on the property.
This pilot program is currently being tested in Arizona, Nevada and New York, but will likely be expanded to other states if successful.
What do you think of this new program? Would you take advantage of it if you could?