New York, NY- Bank of America has announced a pilot program that will allow defaulted homeowners the opportunity to rent their home as an alternative to foreclosure.
Troubled homeowners can retain foreclosure attorneys to help them keep their homes, but often they face the inevitability of having to move. Now Bank of America will offer some of these individuals the chance to rent their homes instead of losing them.
The “Mortgage to Lease” program began this week and will only be available to 1,000 Bank of America customers in Arizona, Nevada and New York, which may be expanded, depending on the success of the pilot program.
Those participating, whose foreclosure lawyers couldn’t stop the process, will turn their titles over to the bank, who will then forgive the mortgage balance. In exchange, they will be allowed to rent their homes for three years at or below the current rental rates. In general, the rent will be lower than their mortgage payments. The current occupants will not have to pay property taxes or home insurance premiums.
In order to qualify for the program, a homeowner must meet certain criteria. They must be at least 60 days behind on their payments, and be underwater, owing more than their homes are worth.
B of A will sell the homes to investors if they agree to allow the tenants to stay in their homes.
Even though some homeowners can have their foreclosure attorney negotiate for a mortgage modification, this program will allow people who do not qualify for a modification the chance to stay in the home they worked so hard to attain.
If the program is successful, B of A will expand the program to more of their customers, in the effort to help stabilize housing prices and help the industry recover.