Selected homeowners facing foreclosure will now have the option to remain in their homes as renters, announced Bank of America. The “Mortgage to Lease” program will include around 1000 homeowners with BofA mortgages in Arizona, Nevada and New York reports CNNMoney. The bank may broaden its reach to a larger group in foreclosure depending on the performance of this initial pilot program.
According CNNMoney, the selected homeowners will be over 60 days delinquent on their home loans, have an income high enough to pay rent, and will not have any other liens on the property. The title of the properties of those selected will be transferred to the bank and any outstanding mortgage debt will be cleared. The homeowner will then have the opportunity to lease their home up to three years at or below the current rental rate. Bank of America will own the properties in the beginning stages of the pilot program, eventually transferring ownership to investors.
“Our priority in designing a solution that helps our customer,” said Ron Sturzenegger, an executive at Bank of America. “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.”