16 Jul Distressed Home Owners Become Renters with Bank of America
Bank of America has come out with a cutting-edge program for home owners who are unable to qualify for loan modifications on their mortgages. Close to 300 letters were sent out to borrowers inviting them to apply for the mortgage-to-lease program that is currently being tested in four states.
More letters are expected to be mailed soon to home owners who find themselves in danger of foreclosure. If approved under the program, they would remain in their home as renters and the home would be sold to investors. To qualify, home owners must be at least 60 days behind in their payments, and have exhausted all other loan modification resources.
Bank of America is reviewing the program during the trial period to see if it might work across the country. After losing a sizeable amount of money during the foreclosure and eviction process, it was clear there had to be another way. B of A hopes to recoup more proceeds this way, instead of dealing with the vandalization that many home owners resort to when they are forced from their homes.
Additionally, most evicted home owners search for single-family rentals in their same neighborhood to maintain a sense of normalcy for their families. Incidentally, the program is good for both the borrower and the community.
There are currently 50,000 Bank of America employees handling workouts and foreclosures on troubled loans. For this particular program, Bank of America will contact eligible home owners and invite them to participate. There is currently no way to apply for the program independently at this time.