Many people have been affected by the down economy and poor real estate market, which has led many homeowners to face foreclosure of their homes. Bank of America has stated a new program for people who are facing foreclosure by allowing them to become renters of their current homes. The Mortgage to Lease program as it is called will be piloted in Arizona, Nevada, and New York.
People involved with the program will transfer their home’s title to the bank, which will allow the homeowner to have the outstanding debt forgiven. The homeowners will then be able to lease the home for up to three years at rental market rates. The bank will be responsible for paying insurance and taxes on the home, which will also save these people money each month.
The requirements to qualify for the program are that homeowners must have a Bank of America loan, be behind at least 60 days on payments, and be “underwater,” owing more on their mortgages than their homes are worth. The plan with this program is due have the banks rent out the properties for few years and then sell the homes to investors looking to purchase properties with renters already in the homes.
If this program does work well, the need for property management companies will likely increase. Banks may manage these properties themselves, or seek out the help of property management companies to help them manage the properties while they own them as rentals.