Bank of America Begins ‘Mortgage to Lease’ Program, Giving Some Homeowners Facing Foreclosure Option to Rent their Homes
Bank of America has rolled out a pilot program that will allow a relative handful of mortgage customers facing foreclosure to remain in their homes by becoming renters.
According to NPR, BofA’s ‘Mortgage to Lease’ program, launched earlier this week, will be made available to less than 1,000 selected customers in three states who meet certain conditions.
Participating homeowners will be required to sign over their home titles to the bank, which will then forgive their outstanding mortgage debt. The former homeowners will be allowed to rent their homes for up to three years at or below going rental rates. Those rents will be less expensive than the mortgages the customers are walking away from, and they won’t have to pay property taxes or homeowners’ insurance.
Selected customers in Arizona, Nevada and New York will be eligible to participate in the program. Other requirements include: having a BofA loan, being at least 60 days delinquent on mortgage payments and being “underwater,” or owing more on the loan than the home is worth.
“This pilot will help determine whether conversion from homeownership to rental is something our customers, the community and investors will support,” BofA executive Ron Sturzenegger said in a statement.
“If this evolves from a pilot into a more broadly based program, we also see potential benefits from helping to stabilize housing prices in the surrounding community and curtail neighborhood blight by keeping a portion of distressed properties off the market,” he added.
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