As the calendar page turns with the start of a new
Spring season, all eyes [in the Real Estate world] are on the pilot
program introduced by Bank of America. This program, aptly named Mortgage to Lease, is a new alternative to foreclosure which has the
real estate world stirring with newfound optimism. The Mortgage to Lease program will initially be extended by Bank of America to 1,000
homeowners within Arizona, Nevada and New York who fit the pre-screening
criteria, but analysts are hopeful the program’s initial success and
popularity will lead to further expansion, possibly even nationwide.
Bank
of America is currently screening for homeowners who are at least 60
days behind on their mortgage payments, have been declined a loan
modification, and who owe more than their house is currently worth.
Much like the well-known practice of deed-in-lieu of foreclosure,
homeowners will be asked to deed their properties back to their lenders
[i.e. Bank of America]. However, home occupancy rights will not be
surrendered with the forfeit of home ownership in this program, as these
former owners will be permitted by their lenders to rent the house at
or below market rents for a period up to three years. As seen
previously with deed-in-lieu cases, all existing loan balances will be
forgiven. For all my Los Angeles readers out there, credible sources
have mentioned this Mortgage to Lease pilot program will soon be offered
in Los Angeles County by Bank of America, with an added wrinkle of the
opportunity to buy back the home at fair market value after the three
year rental period has expired.
