Last month, Bank of America launched a new pilot program designed to give homeowners an alternative to traditional foreclosures. According to Business Week, the program provides qualifying homeowners at risk of foreclosure with the opportunity to become renters of their homes.
The program started in March 2012 with fewer than 1,000 people in three states. While Minnesota homeowners are not yet eligible for this program, they may be in the future if the program is expanded. The Mortgage to Lease program is not a new concept. During the Great Depression, banks used a similar program to keep people in their homes. However, it has not been a popular concept over the last half century.
Those who participate in Bank of America’s “Mortgage to Lease” program transfer title of their homes over to Bank of America and have the remainder of their mortgages forgiven. Those who transfer the title will then be given the option to rent back their homes for a period of three years at an amount less than they were paying on their mortgage. Additionally, the property taxes become the responsibility of the bank.
Homeowners who qualify for this program are considered to be at high risk of foreclosure because they have high loans relative to their homes’ worth, they have already tried loan modifications, and they are 60 days or more delinquent in paying their mortgages.
If you are having trouble paying your mortgage in Minnesota, it is important to seek the advice of a Minneapolis-St. Paul foreclosure attorney before making any deals with the bank.