Bank of America Will Choose 1000 Homeowners In NV, NY, AZ
Very interesting news I read in the NY Times this morning:
“And Bank of America said in late March that it would begin testing a plan to allow homeowners facing foreclosure the chance to rent back their homes and wipe out their mortgage debt.
Eventually, the bank said, it could sell the houses to investors.”
Pardon me? A plan that would help struggling homeowners keep their home and even wipe out their debt?! Now, you’re talking.
Wish you banks thought about this plan 2-3 years ago, sorry, this my cynical self talking. But this is good. I can’t even count how many of my clients have asked me how they can keep their house in spite of their home’s “upside down” values. They want to keep their home against all odds!
If you think this is a ridiculous idea, think again, and wait ’til you get a Notice of Default stating that your home for the last 10 years — and all the memories attached to it — will be foreclosed by a amoral financial institution. Sometimes, actually, many times in life, there is just no numeric value (defying logic) for the things we’ve grown to love.
So yes, Bank of America is testing this plan. Here’s some more information about it:
“Under the terms of the pilot program, which will be offered initially to about 1,000 consumers only in New York, Nevada and Arizona, homeowners will give up the title to their property in exchange for bank forgiveness of their mortgage debt. They would then be able to rent the property for up to three years.”
As the bank have started to become smarter, they are are learning from seasoned investors who are buying loads of properties and renting them out. Instead of just cutting the bank’s losses short with short sales and foreclosures, they want to experiment with the viability of being landlords themselves.
This is a brand new concept no doubt, but this could actually be a pretty good move not only for the banks but also for the struggling neighborhoods (less foreclosures, the better prices will hold up). I could almost hear some of you “Bank of America as my landlord? Are you Serious?!” Hey..nothing in this severe down market was normal and average so I’m not surprised anymore.
More excerpts from the above article:
“The rent payments would be less than the monthly mortgage payment and be set at or below market rates, according to bank officials.”
“For consumers, however, the window is small. Bank of America will not be seeking applicants or taking volunteers for the pilot program; instead, it will select and invite about 1,000 customers to participate. The bank has already started contacting potential participants.”
“In order to qualify, consumers must hold mortgages that are owned by Bank of America, have been delinquent for more than 60 days, still live in the home and have exhausted other options. Homeowners whose mortgages are serviced by Bank of America but owned by other investors, like Fannie Mae or Freddie Mac, would not be eligible for the pilot program.”
If you’re interested in this program (and you qualify), you would have to wait for the bank to pick you out. But I think it won’t hurt if you try to contact them.
Godspeed.
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