Posted: 04 Apr 2012 10:13 AM PDT
Last month, Bank of America announced a pilot program that will provide some distressed property homeowners with a new foreclosure alternative. This new â€œMortgage to Leaseâ€ program will allow homeowners facing foreclosure to remain in their homes by converting from home ownership to rental.
In this program, participating homeowners will transfer their home titles to Bank of America for forgiveness of all outstanding mortgage debt. Then Bank of America will lease the home to the former homeowner for up to three years at a rental price less than their mortgage payments, making payments affordable. After the three-year rental period, Bank of America will sell the acquired houses to investors.
For now, the â€œMortgage to Leaseâ€ program will only affect 1,000 specifically selected Bank of America customers in Arizona, Nevada, and New York. During this initial phase, Bank of America will explore customer, community, and investor reactions and assess the feasibility and practicality of expanding the program.
In order to qualify, the homeowner must meet the following criteria:
This program is tiny and for now will affect less than one-tenth of one percent of all the homeowners with a problem. Remember, Bank of America will be hand-selecting and notifying homeowners for the initial launch.