Bofa Tries Turning Distressed Homeowners into Renters
The Los Angeles Times (5/29, Reckard, Lazo, 630K) reports, "Unable to qualify for modifications on Bank of America mortgages, a few of California's most distressed homeowners are being offered one last chance to stay in their homes: Become renters instead." BofA began a pilot program this week to determine the viability of this approach. The bank "sent 300 letters this week inviting borrowers without other options to apply." It will send another 1,500 letters as part of the pilot. Such properties will be sold to investors. BofA "typically would recoup far less than what's owed but would come out far ahead compared with where it would be after evicting borrowers, making 'cash for keys' payments to help them move and selling empty and often vandalized foreclosures in the troubled housing market."
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