Homeowners in Foreclosure Pilot Program

NEW YORK – March 23, 2012 – Bank of America says it has begun a pilot program offering some of its mortgage customers who are facing foreclosure a chance to stay in their homes by becoming renters instead of owners.

The “Mortgage to Lease” program, which was launched this week, will be available to fewer than 1,000 BofA customers selected by the bank in test markets in Arizona, Nevada and New York.

Participants will transfer their home’s title to the bank, which will then forgive the outstanding mortgage debt. In exchange, they will be able to lease their home for up to three years at or below the rental market rate. The rent will be less than the participants’ current mortgage payments and customers will not have to pay property taxes or homeowners insurance, the bank said.

“This pilot will help determine whether conversion from homeownership to rental is something our customers, the community and investors will support,” Ron Sturzenegger, legacy asset servicing executive of Bank of America, said in a statement.

Among requirements to qualify for the program, homeowners must have a BofA loan, be behind at least 60 days on payments and be “underwater,” owing more on their mortgages than their homes are worth.

The bank based in Charlotte, N.C., said it will at first own the homes, then sell them to investors. If the program is successful, it could be expanded to include real-estate investors who buy qualifying properties and keep the occupants on as tenants.

“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,” Sturzenegger said.

Foreclosure tracking firm RealtyTrac says foreclosure activity has picked up in some states, as banks deal with a backlog of homes with mortgages that had gone unpaid yet remained in limbo due to delays stemming from foreclosure-abuse claims.

Nevada has the nation’s highest foreclosure rate as of last month, with one in every 278 households in the state receiving a foreclosure-related filing, twice the national average, according to RealtyTrac. Arizona ranks third behind California, while New York has not been as hard hit, with one in every 4,604 households receiving a foreclosure-related filing.

source:Claudette Bruck, CCIM Legislative Chair Florida CCIM Chapter

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1. Eliminating Property Tax Loopholes

Amendment 4 empowers the Legislature to stop “recapture”, a property tax trap that forces some homeowners to pay higher property taxes even if their home’s market value declines.

2. Saving Small Business Owners

Amendment 4 will lower the cap on assessment increases for non-homestead properties from 10% to 5% per year. For small businesses and commercial property owners, Amendment 4 provides the stability and the tax relief that they need to get out of this recession and create the jobs Florida needs now.

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With nearly 1 million Floridians still out of work and hundreds of thousands more underemployed, we must pursue new policies that will drive prosperity back to Florida and restore our economic future. Amendment 4’s new cap on non-homestead properties will attract new investment in Florida’s economy, which will help revitalize communities impacted by the recession, and spur job growth in the cities and counties that need it most.

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Families looking for their first home or looking to move back into a home after downsizing for the recession will benefit greatly from Amendment 4. Amendment 4 offers an additional homestead exemption for new homebuyers that will last up to five years, rewarding new homeowners for finding the right home for their needs.