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Bank of America Pilots Program to Tackle Foreclosures


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Bank of America

 

In an attempt to detangle some of the knots in its foreclosure saga, Bank of America has announced an interesting program to convert some of its debtors of homes and rental properties into renters. This very unique program will launch as a pilot program and, depending on its success and results, will be extended to cover more and more delinquent homeowners.


The criteria to qualify for the program includes a current delinquency, a high loan balance to property value ratio, and an ability to cover the rent for the property. The program requires homeowners (and/or any eligible landlord) to relinquish the title to the property in favor of Bank of America and have all currently payable debts forgiven. Bank of America will in return grant them the option of leasing the home (essentially a lease to own deal) for up to three years at or even below the prevailing market rental rates.


Banks are hoping that the incentive payments will cut out resistance from homeowners and offer up the best solution for all. It is a win-win for the banks, particularly because they skip out on a potentially long legal battle on the one hand, and take advantage of making a better deal through a short sale on the other.

Bank of America states that it will hold on to property titles for the time being but that it eventually plans to convert them to investor titles. It is hopeful that the program will offer some relief to thousands of delinquent homeowners and will go some way towards helping stabilize property rates in areas covered by the program.

To read more on Bank of America’s efforts, continue by clicking here.



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