Bank of America tests new home foreclosure program

[Royal Sloan 09]

(Reuters) - Bank of America Corp said on Thursday it was launching a pilot program that will allow homeowners facing foreclosure an opportunity to remain in their homes while transitioning to tenant status.

Under the pilot program known as "Mortgage to Lease," participants will transfer their property titles to the bank and have their outstanding mortgage debt forgiven, Bank of America said.

Fewer than 1,000 customers will be invited to participate in the first phase of the pilot and the bank said it has started selecting customers in test markets in Arizona, Nevada and New York -- three states hit hard in the housing downturn.

http://www.reuters.com/article/2012/03/23/us-bankofamerica-idUSBRE82M04520120323


Bail-outs, Settlements and more foreclosures, it's a Banksters dream come true! Oh yeah,
Feelin' Screwed over yet America? Booyah

[Mnemosyne]

1. Must have found loopholes already. nt

[th1977sk]

5. yup

[Mnemosyne]

7. Welcome th1977sk! We know the only time they do anything, is when it benefits them. No other reason.

[DJ13]

2. This is where the government should have allowed "cram downs" via bankruptcy

Force the banks to write off the over valuation, and rewrite the mortgage based on a judge's determination of actual valuation.

The Obama administration inspired "mortgage" option only serves to allow the banks to keep the properties on their books at original value, screwing over those homeowners who will end up losing all the money they have already put into maintaining their mortgages.

[Ilsa]

3. I wonder if the people will have

taxable "income" charged to them in the form of debt forgiveness. They could get screwed on that.

Yeah, the banks should be forced to write down the value of the asset and a loan with new terms offered.

[dixiegrrrrl]

4. Wonder how much rent the banks intend to charge.

So the banks will end up with a renter in the foreclosed home, instead of an empty foreclosed home.
And in order to have the debt "forgiven" there will most likely be a iron clad lease, trapping the people in the home they once owned.
If people cannot afford a mortgage, will they be able to afford a bank set rental amount?

[Po_d Mainiac]

6. The broader question

Is how much the banksters will charge for services in maintaining the units as rentals.

Assuming that once again the MO will be to garnish as much IGG's from 'fees' these will be be bundled off as 'rental backed securities' (or some other euphemism for barnyard waste). The fine print will be jam packed with fees for everything from lawn care (even in the case of houseboats) to snow removal (esp. in Las Vegas, NV).

Why do I envision the bernank at the front of the line, adding this crap to his ever expanding folio?