Experimental foreclosure solution in US
A new program, from the Bank of America, being tested in three States aims to help families at risk of foreclosure to stay in their homes.
The USA real estate market has faced many hurdles since the start of the Global financial crisis. House values have been decimated across the country and millions of homeowners are trapped in properties that are now worth thousands of dollars less than the American mortgage attached to the property.
The pilot program, Mortgage to Lease, is operating in three states that have suffered severe problems during the financial downturn; Arizona, Nevada and New York.
Families accepted on to the program are given the chance to stay in their home for a minimum of three years while paying no more than the going rental rate. The title deeds are signed over to the bank and in return the Bank of America will write off their outstanding mortgage debt – allowing the former owners to avoid foreclosure.
While it is too soon to say how well the program is working if it is successful then it could be rolled out across other regions.