CALABASAS, Calif. – Beginning this week in targeted hard-hit markets, Bank of America will offer a limited number of mortgage customers who are facing foreclosure an opportunity to remain in their homes, but transition to tenant status, through a pilot program called “Mortgage to Lease.” “When homeowners are struggling to make payments, owe more on their mortgage than their home is worth and face certain foreclosure, one of their greatest anxieties is the transition process they face in moving from their home,” noted Ron Sturzenegger, Legacy Asset Servicing executive of Bank of America. “This pilot will help determine whether conversion from homeownership to rental is something our customers, the community and investors will support. This program may have the potential to further round out the broad set of solutions we offer our customers in need of assistance.” To maintain test controls, the Mortgage to Lease pilot will be conducted strictly on a solicitation basis; there will not be any opportunity for customers to volunteer or apply for consideration. Fewer than 1,000 customers will be invited to participate in the first phase of the pilot. Initial outreach has begun to preselected customers in test markets in Arizona, Nevada and New York, three states hit hard in the housing downturn. 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.
