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Jeremy Klein's Blog

By Jeremy Klein | Agent in Studio City, Los Ang...

The Loss Mitigation Menu May Just Have a New Entrée Addition


                                  
      Recent studies indicate that one in three homes is presently underwater nationwide.  Many such households have either attempted in the recent past, or are currently amidst, loss mitigation resolution efforts to alleviate themselves from their distressed property situations.  For some time, the menu of mitigation entrées has been somewhat limited in scope to the following few choices – loan modification, refinance, short sale, or deed-in-lieu.  Bank of America’s pilot testing of their Mortgage to Lease program may soon mature into a permanent, new loss mitigation option for underwater households. 

     At present, Bank of America has solicited an estimated 2,500 households in Nevada, New York, Arizona and California.   Analysts are optimistic that the program will not only be received with open arms by the general public, but identified by investors as a solid loss mitigation tool as well.  Myself and my Equitable Realty & Services co-workers are all optimistic that we will soon see the Mortgage to Lease program added as a permanent loss mitigation menu item nationwide.  While said program is still in its testing phase, now is the perfect opportunity to identify the prequalification requirements so my California readers can be first line in the application process once the pilot tag is lifted.   

·   Have loans owned by Bank of America.
·    Are delinquent for more than 60 days.
·    Have exhausted modification solutions or have not responded to alternatives to foreclosure, including short sale and deed-in-lieu.
·     Have high loan balances in relation to their current property value.
·     Face considerable risk of ultimate foreclosure.
·     Have no junior liens.
·     Are still occupying the home.
·     Have adequate income to make an affordable rent payment.

If you believe that you meet the above criteria, keep a watchful eye on new developments, because I believe the Mortgage to Lease program floodgates to open up very soon.

Keep in tune for a follow-up blog which will summarize the key benefits of the Mortgage to Lease program.

Comments

By Pat and Steve Pribisko,  Thu Jun 14 2012, 13:13
I am thrilled that the B of A is testing this program. If it moves forward with this program, it will cause other banks to do the same.
By Jeremy Klein,  Mon Jun 25 2012, 14:56
I firmly agree and am too thrilled.

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