Bank of America has launched a pilot program that will let some homeowners at risk of foreclosure become renters and stay in their homes.
Fewer than 1,000 borrowers in Arizona, Nevada and New York will be enrolled in the test program, which began this week. Those selected will transfer the title of their homes back to Bank of America and have their mortgage debt forgiven.
The homeowners can rent the homes for up to three years at or below their area's market rental rate. The rental payments will be less than the borrowers' mortgage payments, the bank said. And they will not have to pay property taxes or homeowner's insurance.
In New York, bank spokesman Rick Simon said, "the limited test population" would be spread throughout the state. "Some will be on Long Island, as well as in several New York City boroughs and various upstate locations . . . there is not a large saturation of customers in any one community," he said.
The trick will be to find homeowners who are struggling with their mortgage payments but have enough steady income to make smaller rental payments.
Staff and wire reports