Bank of America offers Deed for Lease program. Foreclosure no ...

Home
> Property Management, Entrepreneurship, Real Estate > Bank of America offers Deed for Lease program. Foreclosure no more for 1000?customers.

According to the Wall Street Journal, Bank of America is starting with 1000 mortgage customers who will soon be offered a deal, in which owners in default sign over their house to Bank of America (BOA), in exchange BOA will sign a three year lease with previous owner to rent at market rate. Despite the fact BOA did over 8.4 million foreclosures recently, its hard to say whether 1000 will make a difference. The benefits of such a program allow the home owner to not disrupt their family live, not have to move kids or schools, and not have to face the humiliation of foreclosure. BOA also wins, as they will save?considerably?on the foreclosure process and maintaining a vacant?foreclosed?home. The neighbors of said homes win as well, as they no longer will have depressed home sales in?their?neighborhoods and an onset of new residents moving in. Word is mortgage giant Fannie Mae has been practicing a ?deed for lease? program since early 2009,?although?very discreetly. Many wonder why this is not a bigger movement, and adopted by all banks? So I will lay out a few reasons:

• Congress has currently barred lenders from going into the rental business.
• If banks do foreclose on a home, they must remove it from their books within 5 years.
• Banks worry about?precedence. If they offer it to some, they will probably need to offer it to all if push came to shove. This could mean Bank of America or Citi bank becoming one of the worlds largest landlords.
• Banks fear issues with eviction, if the newly tenant does not pay market rent.
• Issues of who sets the rents, what is market rent?

?

One state Representative from Arizona, Raul Grijalva, recommends the government step in and clear the air. They offer a solution to setting rents, they allow the banks to rent up to 5 years. Despite his recommendation, its likely his bill is going nowhere. From my standpoint, I think we?definitely?do not need government setting rents, or telling banks how to handle their foreclosures. We need less government intervention and allow banks to handle the losses as they see financially fit. Requiring banks to not rent, or to rent, or to establish rents, or giving timelines of 5 years to sell a foreclosed property only makes for complications.

Renters Warehouse, a leading property management company in Minnesota is poised to help lenders and banks to manage or establish rent rates as a contracted ?USHUD property manager. Renters Warehouse uses a sophisticated rental analysis tool that could come in hand when trying to determine rental rates.

Like this:

Be the first to like this post.

verdict in michael jackson trial brian urlacher dr conrad murray verdict take care childish gambino camp drake take care tracklist drake take care tracklist