Bank of America, one of the nation’s largest mortgage servicers, has announced that it will allow a limited number of mortgage customers who are facing foreclosure to remain in their homes as tenants through the bank’s pilot program called “Mortgage to Lease.”
Ron Sturzenegger, Legacy Asset Servicing executive of Bank of America, in a statement said, “When homeowners are struggling to make payments, owe more on their mortgage than their home is worth and face certain foreclosure, one of their greatest anxieties is the transition process they face in moving from their home.”
“This pilot will help determine whether conversion from homeownership to rental is something our customers, the community and investors will support,” Sturzenegger continued.
The pilot program, which is limited to less than 1,000 Bank of America’s mortgage customers who are facing foreclosure in Arizona, Nevada and New York, will have to transfer the title of properties to the bank and their outstanding mortgage debt will be forgiven. In return, the qualified mortgage customers may remain in their homes as renters.
It can be noted that Arizona, Nevada and New York are the three states badly affected by the U.S. housing crisis.
Aside from the location requirement, this pilot program will only include mortgage customers who meet the following requirements:
• 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.
At first, the bank will retain ownership; however, these properties will be transitioned to investor ownership.
“If the Mortgage to Lease program proves viable, it may lead to a broader program, potentially involving selected real estate investors who would purchase properties that meet their predetermined specifications and keep the previous homeowners in place as tenants,” Bank of America statement says.
Earlier, the Federal Housing Finance Agency (FHFA) has invited investors to purchase approximately 2,500 Fannie Mae foreclosed properties with the condition that these purchased properties must be rented out for a specified number of years.
Whether you are a first-time home buyer, first-time home seller, empty nester, thinking about selling a home or buying a home, do contact the Guldi Real Estate Group. In Southern Maryland, the Guldi Group is the number one real estate team.