The initial trial of this program will be limited to 1000 homeowners located in New York, Arizona and California and qualifying homeowners will be mailed a letter of program availability…owners will not be able to call in and request participation.
The pilot population will include customers who meet all of these 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.
Bank of America will initially retain ownership of the properties, assigning their oversight to property management companies and plans to eventually sell them to investors.
As always…I have to add my analysis an opinion…it is MY blog you know! As is typical with the TBTF financial institutions, I have my reservations that this program is being rolled out to benefit the homeowner.
This is how I see it; BofA has non-performing loans (receiving no monthly payment), they know that they will eventually have to foreclose on the homeowner…if the homeowner decides to hire a sharp foreclosure defense attorney, it will take them a long time and a lot of attorneys fees to eventually take the home back.
Their new angle is to take the easiest route in obtaining ownership/title...a deed in lieu of foreclosure...where the owner willingly deeds the home back to the bank. Then, instead of having to sell the home and book a huge loss, the banks will keep the home on the books at full value. And the coup de gras is that the homeowner who was making $0 in payments to the bank is now paying every month! And if they don't pay...eviction is much, much easier than foreclosure.
Another consideration is that the bank...or a delegated comapny, is now your landlord...whom you have to call when your toilet is overflowing, your a/c is broken in the middle of August, etc (you get where I'm going). With the way the banks (and their delegated comapnies) respond, how good of a landlord do you think they will be? You'll be sweltering in 97 degree heat, on hold for 45 minutes so you can be connected with the right department, only to be disconnected!
Sorry to be so cynical...but that cynicism has been hard earned over the past 4 years as a result of negotiating with these banks on behalf of my clients.
Thanks for reading...and call or email if you have questions.
Steve Jackson
561.602.1258
