Bank of America Pilot Program

Bank of America Pilot Program – An idea that was in place during the Great Depression is being trial run by Bank of America. The pilot program offers a possible option for people facing foreclosure to stay in their homes.

Bank of America Pilot Program

Bank of America Pilot Program

Bank of America Pilot Program

The premise is simple. People on the verge of foreclosure are offered the option to give their home to the bank and then stay on as renters. In return for this exchange all of their mortgage debt is forgiven and obviously the bank get to avoid going through the entire foreclosure process, which can often take around 2 years and cost close to $80k.

According to an article on RepublicanAmerican:

“Bank of America says it’s targeting homeowners who are at “considerable risk” of foreclosure; have high loan balances relative to their home’s value; have exhausted all loan modification programs, and have been delinquent on their mortgage payments for more than 60 days.”

The pilot program called “Mortgage to Lease” is currently enrolling trial members from Arizona, Nevada and New York. Less than 1000 will currently be enrolled. They are allowing people who have exhausted other loan modification options.

After a period of time the homes could potentially be sold onto investors. I assume the rental agreement would stand for some time afterwards but I don’t know the full details of that!

On one hand I can see some potential benefits for both parties in such a program. Obviously a person / family would not be made to immediately move out and the stress of foreclosure would not be an issue. The local area and community would also not be seeing the effects and drag a foreclosure can bring on a local housing market.

Of course the person will still lose their home and all the money they have spent on the mortgage up until now. This is obviously soul shattering for a family and these programs don’t solve the whole problem. If some kind of middle ground could be found where both parties keep share the value of the home, maybe just part selling back to the bank, who can then sell the portion onto an investor, then maybe that could provide a more favorable situation.

What do you think about this new program? Do you see potential for people facing foreclosure or is this all for the banks benefit?

I’m looking forward to your thoughts.

Related: February Home Sales

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Nearby Foreclosures Bring Prices Down, What To Do

Nearby Foreclosures Bring Prices Down, What To Do

Nearby Foreclosures Bring Prices Down, What To Do

Nearby Foreclosures Bring Prices Down, What To Do

Sadly the value of your home isn’t just affected by how you treat it and what you do on your plot of land. The world around your home is a massive factor in the perceived value of your home which is after all the main reason why prices change and fluctuate up and down the country, area to area.

Some areas go up, some go down. Affecting factors include things like crime, quality of local schools, transport links, recent weather patterns and just about anything else you can think of! So it is no surprise that when foreclosure signs start appearing in your neighborhood that the value of your home could take a hit.

Local foreclosures are not really a factor you can easily control, sure you could band together as a community and help each other through financial problems but I don’t see that kind of community kinship forming anytime soon! The fact is that in this awful economy there will be foreclosures, sometimes massive amounts of them, in your local and surrounding areas.

Unless it’s a significant portion of the properties in your neighborhood they may not terribly affect the actual valuation of your home. However you may well find that buyers just are not queuing up and even when viewers do come along offers are not following up and making offers as much as one would expect.

Nearby Foreclosures Bring Prices Down, What To Do

Foreclosure is a terrible thing but it doesn’t always reflect on the quality of your area. The people foreclosing could be good considerate and hard working peoples, it’s not like having drug dealers and users taking over the area but I am sure from the outside in it has that kind of effect on people coming round to see the area, so what on earth can you do about it? Here are some of my ideas

Some foreclosed homes are wrapped up quietly, no big scary tape and boards, no massive signs, they are the kind of foreclosures you want in your area ideally so when a nasty one does go up it could be worth getting a group of concerned residents together to contact the foreclosure company and politely ask that they clean up the property. Failing that contacting your local representative and seeing if they can put any pressure on the companies to keep the properties presentable could be an option.

The land outside of the properties can start to get tatty too and this requires contacting your local government or maybe even dealing with it yourself and cleaning it up a little. While you are at it, it could be worth cutting the grass in the foreclosed properties front gardens (i’m not sure if this is legal so maybe inform the local police first and ask for permission).

If you are dealing with an estate agent and there is a longer way into your area that avoids the foreclosures you could ask that they bring in clients that way. If dealing direct you could direct them in this way. They will see the area eventually but first impressions count for a hell of a lot and if they can see the beauty of the area it may increase their likelihood to offer.

Slightly drop your asking price. If you just drop a tad off your price you may increase views significantly and broaden the chance of someone seeing that the foreclosures are not necessarily an indicator of a bad area.

Nearby Foreclosures Bring Prices Down, What To Do, Your Tips?

These are just my ideas and you should seek professional advice too, from local government and local estate agents, to see what they can do about foreclosures in the area from an appearance and an actual getting them sold on perspective.

I bet though that, even if you don’t have experience, that you have some good ideas and I would love it if you took the time to share them with us all.

Related: How to Buy a Foreclosed House

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