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.
Testing a mortgage-to-lease program in the Golden State, Bank of America Corp. sent 300 letters this week inviting borrowers without other options to apply. An additional 1,500 letters will go out in the next few weeks as BofA — which also is testing the program in three other states — evaluates whether a national rollout is feasible.
BofA plans to sell the homes to investors. It 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.