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So the homeowners aren't paying their bills on their own home. Why do the banks expect that they will start paying their bills after the transfer takes place and it is no longer their home? I'd like to see the results of this pilot to see how many non-paying tenants they have after 6 months.
This seems like such a no brainer, I'm surprised it didn't happen years ago.
The only reason I can see it didn't is the way the Comptroller of Currency rules about how REO property is treated for accounting purposes.
But when they take it back they can keep it at the "loan value" as an asset and don't have to write off the loss until they sell it. It's a good idea to avoid an influx of foreclosures, deal with the MERS debacles, and then sell off assets in a controlled fashion.
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
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Quote:
Originally Posted by NinaN
So the homeowners aren't paying their bills on their own home. Why do the banks expect that they will start paying their bills after the transfer takes place and it is no longer their home? I'd like to see the results of this pilot to see how many non-paying tenants they have after 6 months.
Agreed. I think that for most folks facing foreclosures, the mortgage payment would be substantially more than the projected rent payment and easier to swallow than the current payment.
I don't think most folks like the disruption of moving either. It just might work out.
I think it is a great idea. Aside from the reasons pointed out, there is also the advantage of removing them from ownership status to tenant status and now will be under tenant law.
1. Bank of America is selecting out 1000 hand selected distressed homeowners.
2. They will have clear documentation whether these homeowners have income to support paying the rents.
3. In a nutshell they are only targeting strategic defaulters who have the financial means to pay the rent.
Many homeowners in distress simply cannot afford "market rent or even below market rents" of the current home they live in.
These homeowners are being hand selected haven't paid their mortgage in X amount of months. What makes you think they will want to start paying it now especially in Florida where many can easily go 3 plus years without a single mortgage payment.
Kicking out a renter is just as much paperwork, if not more time than a foreclosure. I cant see a bank who doesn't have time for foreclosures do any better managing rentals.
I think it is a great idea. Aside from the reasons pointed out, there is also the advantage of removing them from ownership status to tenant status and now will be under tenant law.
And don't overlook the fact that the Title Ins. companies have put a hold on issuing Title insurance on foreclosed homes because the title's might be clouded! So at least they can start getting money back in .
I have not delved into the details of this program, but my gut tells me there is a reason why B Of A is doing this, and it might not (probably isn't) to help the homeowner.
I am B of A, and you have chosen to not make your mortgage payments, but i know you have a 'good' property, and have 'income'.
So i take over your house, and you pay me rent for a period of time, which covers my carrying costs.
As B of A, i only elect to do this where the likelihood of a pop in housing prices will rise above what you currently owe me on the mortgage.
So, if Bo of A is correct, i take you out of your house at the bottom of the market; you pay me carrying costs in the form of rent, which also helps to reduce the mortgage loan hit i take when i forgive the mortgage.
Then, my prediction that the market has bottomed comes true in three years, i kick you out, and sell the property for a gain?
Isn't this what all of the talking heads have been asking for? How do i get into single family residency investment, without the hassle of finding tennants for each of the properties.
I guess i am just being nefarious, but i have NEVER seen B of A do anything which wasn't for the immediate and direct benefit of B of A.
And don't overlook the fact that the Title Ins. companies have put a hold on issuing Title insurance on foreclosed homes because the title's might be clouded! So at least they can start getting money back in .
No problem getting title insurance around here on foreclosure sales. Maybe its a local thing?
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