Monday, March 26, 2012

Bank of America Starts a pilot program “Mortgage to Lease” for customer’s facing foreclosure

Bank of America the nation’s largest mortgage lender is making the news again this week with the start of a pilot program with 1000 of its mortgage customer’s in a “Mortgage to Lease” program.
To qualify the homeowner must have a mortgage loan with Bank of America, be at least 60 days late on their mortgage and be “underwater” owing more than their home is worth.

The homeowner agrees to transfer title to the bank and the bank agrees to forgive the mortgage debt.
In exchange the bank will lease the home back for a period of three years at or below rental market rate.
This will be less than the mortgage payment. The bank will be responsible for the taxes and insurance.

The potential benefits are to stabilize housing prizes in the surrounding neighborhood and keep distressed properties off the market in an effort to sell to investors.

This is a big step and long overdue but the wheels turn very slow in the corporate American. I hope this works and other banks follow. It would be nice to see vacant REO homes rented out by the banks as well. Housing in many areas of our country is limited and families are in need of housing while these homes sit vacant. It would be nice to see Lease with Option to purchase programs started by the banks. If no one is buying them why not! It would be a great way for people to work into homeownership over a period of time.

I think maybe even that same homeowner on BofA’s pilot program that had to give up his home should be given the option to buy it back if they are able. Just saying…

Here’s a video of CEO Steve Berkowitz from Move Inc. talking about our “Recovering Across the Board”
I thought it was pretty interesting, I hope you do too!

Thank you for stopping by my blog today, don’t forget to leave a comment.

Roxy Redenbaugh
ACMC, Loan Consultant
Branch Manager


Betty said...

Yes, this is interesting news. It's time the fat cats try helping out the ones that helped them meet their quotas.

Anonymous said...

i agree i would be nice to see other banks follow bofa's lead.'
Not a bad idea either roxy about the lease option deal. i see alot of empty houses that could be rented, leased or leased optioned to families who want to buy but just need a little help.