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Bank of America has unveiled a pilot program with 1000 customers that will allow them pardon of their outstanding mortgage debt in exchange of transferring their homes’ title to the bank – but would allow them to lease their home up to three years at par or below rental market rates. In effect, it would allow participants in the program to continue residing in their homes, though lose absolute ownership, and remain on as a leasee.
Bank of America has promised that the rent would be less than the customer’s current mortgage payments and additionally the customers would not be liable for property taxes or homeowner’s insurance.
The move comes at a time when the owning of physical assets by banks and financial institutions is under heavy criticism considering that banks like JPMorgan Chase and Bank of America have extended the principle of owning physical assets to the monopolizing and controlling of warehouses and energy and oil distribution networks. Last year, JPMorgan made a mind-boggling $25 difference a barrel just by not allowing any other transport fleet but its own to carry oil from its warehouses.
Ron Sturznegger, legacy asset servicing executive of Bank of America said in a statement that “This pilot will help determine whether conversion from homeownership to rental is something our customers, the community and investors will support.”
Eligibility for the programs includes a BofA loan, and the candidate must be behind payments by at least 60 days and must be ‘underwater’ meaning that the mortgages on their home is worth more than the current value of the property.
Bank of America stated that “If this evolves from a pilot into a more broadly based program, we also see potential benefits from helping to stabilize housing prices in the surrounding community and curtail neighborhood blight by keeping a portion of distressed properties off the market.”
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The concerns of Bank of America in helping the community is really overwhelming and commendable in that by allowing a few thousand citizens to continue in their forfeited homes, it will be garnering support that it needs to continue overcharging millions of citizens by questionable control over physical assets in oil and energy.
The program would be tested first in the states of Nevada, Arizona, and New York.
Nevada has the highest foreclosure rate in the nation as of last month, with one in every 278 homes receiving a foreclosure filing.
The bank said that it will first transfer the titles of the homes to that of the bank and then sell off the homes to investors which may include real-estate investors who keep the occupants on as tenants.
