by charging exorbitant rent so that they'll never be able to own the home. They can evict them by putting clauses in the lease no one can abide, in language only a con artist and/or shyster lawyer can make out.

This way, B0fA gets credit for "helping" homeowners WHILE they steal from them.

ti the mortgage payments. And know what the occupants' alternatives are to
continue paying rent and living there.

If BofA collects rent they get to own the house + collect rent.

They've robbed the homeowner of his/her equity and they don't want the property values to fall any farther in the neighborhood. It doesn't bode well for everyone else in the area when a shuttered, foreclosed house slowly rots on its foundation. They are doing it for themselves. I can't imagine how disheartening it would be to live in my house after it was stolen from me while I continue to make payments.

because one of the conditions of the program is that the owner be upside down on their mortgage. not saying it's a good idea, but there might be some scenarios where it works well if the rent is much less than the mortgage payment.

sP

is not neccesarily a deal. They could go out on the open market and probably do just as well or better.

but, i would at least investigate it to be sure it wouldn't work out... oh, and read the HELL out of the fine print (maybe get a lawyer to look it over) and make sure there are no tax ramifications.

sP

which adds up, when you factor in everything plus your time and stress, two things that cost BoA nada. And most people can't afford to consult a lawyer, another way BofA has been screwing people.

I swear, if you'd have asked me who I would despise most in my 50s twenty years ago, I wouldn't have guessed the national banks. The MIC, oil companies, the wingnut right, BigAg maybe but our banks? What they're doing to working families is obscene and there's no end in sight.

If their house is underwater, then at least in some cases, that is due to financial market manipulations and the bank knew they were selling crap when they 'bundled' it. If the homeowner took advantage of a home equity loan before the housing market crashed and found themselves with more debt than they could handle because their houses were overvalued, then who authorized a loan with BOA except BOA? The former homeowners take the loss and BOA prospers.

did for some friends of ours. they put about $50K into the downpayment of their home...financed about $200K and now their home is worth about $120K so they're down about $130K right now...so that is WAY more than their downpayment so if they were to sell today they would certainly lose it.

a lot of this is the bank's fault for certain, but the entirety of the boom in housing prices falls not only on them but on the gov't and the people willing to pay the outrageous sums and then STILL take out so-called equity. i have no love for the banks in this shitstorm... but sometimes it DOES take two to tango.

sP

My attitude comes from the time when we moved to Charlotte (2004, came right back in 2005). The house my niece bought across the street from our loft apartment in 2003 went for $110K. They sold it in early 2004 for $275K and moved on. The tiny houses in that neighborhood (Arts District) were soon pushed up to $325-400K. They ran in size from 1100 to 1500 sq. ft. and had no basements, no yards, no sidewalks, no garages...no amenities whatsoever. These were basic homes that once housed mill workers (our loft complex was a converted textile mill), not the bosses, not even the supervisors, but low man on the totem pole housing, so they were really (and to me, obviously) overpriced. And yet people were snapping them up like there would never be another chance to buy a home. The banks were appraising them and approving them at those ridiculous prices and allowing people to buy with 5% down. I could see that the prices were already far beyond what a person could ever hope for in appreciation. Charlotte is BOA headquarters and is the second largest banking center in the US. You'd think they'd know better. The crash is also attributable of GWB who wanted a home ownership society. Crash it did and somebody raked off the difference. I'm not trying to argue with you. I'm just still disgusted by what happened.

sorry...I am all about that! have never had so much fun as out dancing...anywho...

we lived out in Concord close to the timeframe you mention. My wife lived in the Chantilly neighborhood before we got married. She bought before the house prices there started climbing and when we sold her house after getting married (to buy out in Concord) she made a pretty penny. We probably sold too soon, but still did ok. We drove back through there a while back and didn't even recognize the place as a lot of the old 1000 sq ft houses were either totally torn down and new houses built OR renovated to the point you could not recognize them any more. So, we are right there with ya on the crazy stuff that can happen when an area gets hot...and when an area gets cold!

nice to chat with you, fellow Carolinian!

sP

Nothing quite like getting the endorphins working for ya when you tango!

I actually looked at buying in that same area of Charlotte at one point.

and then we moved back to NY. The neighborhood had charm but the houses weren't worth the escalated prices. We did enjoy the spirit of community, though, and being able to walk to the restaurants and shops. I liked the neighborhood because there was a good mix of people.

looking for rental income.

Heard that on the teevee this morning

More details can be found in the other threads on DU about this:
http://www.democraticunderground.com/101480701
http://www.democraticunderground.com/11169113

Let add what I posted in one of them:

"In exchange, they( the former homeowner) will be able to lease their home
for up to three years at or below the rental market rate.
The rent will be less than the participants' current mortgage payments and customers will not have to pay property taxes or homeowners insurance, the bank said.
The bank based in Charlotte, N.C., said it will at first own the homes, then
sell them to investors. "

The reason they want paying tenants is to make the homes look like income producing investments when they sell the homes to investors.
Look at this other story from Reuters about the scheme:

The Wall Street gold rush in foreclosed homes

"Investors seeking higher yields are drawn to foreclosures because the rental market is red hot. "
http://www.reuters.com/article/2012/03/21/us-usa-foreclosures-investors-idUSBRE82J12M20120321

PLUS
the investors will buy blocks/groups of houses ( having formed a Real Estate Investment Trust to do so)
but get them at a good discount...
then securitize the rentals the same way the banks did mortgages, and sell the resultant bonds to other investors.

Its a way to create a new bubble out of housing, and to remove houses from public ownership, thus transferring wealth upwards in housing.
We are talking millions of houses here.
That will not be on the market for you and I to buy.
sorta like when all the used cars disappeared from the market, new car prices had no competition.
But only people with money could afford to buy a new car.
Same with houses.
Less supply, higher prices.

Rental prices now are VERY hot.

and we'll be letting the banks and investors do this right out in the open under our noses. What's the old saying: Fool me once.....

it's to help rich people stay in their big homes until something breaks...either they come into a bundle and buy it back or get an investor to buy it. The home is eventually sold though according to what was reported. So no they won't alter the mortgage because they'll lose money...this way they'll eventually make money.

than the transcontinental railroad land grab.

The original homeowner is still in the home. Yes they may be paying a lesser amount per month for their mortgage - but eventually they will have to pay down the mortgage even if the years to pay it down have to be extended to cover the loan.

And if the BoA thinks that because of inflation that those extended years they'll get cheaper dollars from the homeowner and that is how they would lose - why don't they just adjust the total mortgage left to pay to compensate for that - just renegotiate the mortgage.

Altering a mortgage just seems like the common sense way to keep people in their homes. Keep the bank continuing to get money towards the money they lent out. They don't have to foreclose. They won't have a property sitting idle. They don't have to look for a buyer while they will be earning no money on the home at all. They won't have to sell the property at a loss just to dump it.

It seems like a win-win for everybody involved. I still don't get it why they won't do that?

This is an effort to turn these homes into new investments and new speculative "financial instruments." IMO, a new way for "investment banks" to try to game the system.

For the one time home owner, the debt is erased. Unless I am missing some of the fine print, the equity the one time home owner is also erased. But the payment goes down, so in theory some money can be saved before being ousted for a better renter.

maybe they have the other end tied to a pole..and maybe not.

have to be paid. With B of A's glut of homes, I am sure the property taxes are eating a sizable chunk of profit. Why not rent to the ex-home owner, then when the home is sold, give them the boot. All the while the taxes and insurance are paid. Win win for B of A.

Oh! B of A says ...

They want title to the house. They want tenants to pay rent. They want tenants to make all the repairs and do all the maintenance.

Let me simplify: if there's an expense, the tenant pays; if there is income or capital gain, it's the Bank's.

then the foreclosed borrowers would end up being renters, anyway. Also, it might be really tough to get a decent place to rent, since you've usually got to have a good credit score to get a desirable home. That might be tough with a foreclosure on your credit report.

In any case, it's optional. The person who really doesn't want to stay in the home doesn't have to.

Another way to funnel wealth, in this case in the form of real property, upwards to the ones who ALREADY have.

Generically, the system is set up to boom and bust. During the boom, everybody makes money, but the ones that already HAVE capital make MORE. A LOT more. Then comes the engineered bust inherent in the system. Everybody loses money, but the ones who already HAVE capital are MUCH more able to withstand the loss and STILL have money left over to pick up the few assets the working class accumulated during the boom. Of course, they pick up those asset for pennies on the dollar. Then they wait for the next boom and repeat the cycle. Eventually, the few owns EVERYTHING.

It's called capitalism.

A real professionals factual statements and examples laid below to help all of you understand.  
 
This program is great for everyone. There are only a few details I'm unaware of but here is how the program works.  
 
Johnny customer owes 200k on his home. His home is worth 80k. His mtg payments with taxes and insurance are $1900.00 per month. He lost income for whatever reason or got into too much debt or simply got some bad mortgage. Either way Johnny can't pay $1900.00. Johnny tried modifying the terms of his loan with the bank. However the best the bank could do for him was lowering the payment by $300.00 per month. Johnny couldn't afford the $1600.00 either. The bank denied modification knowing the inevitable result was that Johnny couldn't afford that payment and would foreclose even with modification. Johnny is now set to continue to miss payments and ultimately foreclose. Now this leaves the banks with options and Johnny. 
 
The bank can fore close and incur a ton of costs to then sell this property. It's not insured by the government. The banks set to lose a lot of money because they will probably sell for 40k and have expenses to do that. Instead the bank hopes to turn Johnny into a renter a fair market rental prices. Only if Johnny agrees to.  
 
Johnnys option is really this at the time. Foreclose eventually and move out. He will have to pay to move and also pay to rent a place. Or he can accept the program and rent this home he is already in for let's say $1000.00 per month. Johnny can afford that. He stays in the home rents it for 3 years. Then could purchase back one day if able.  
 
the bank would rent the house to him. Have a property management company take care of collecting rents and maintenance. The bank would sell to an investor for let's say 60k. The investor is still  
Bound to the 3year lease. The bank makes 60k instead of the 40k it would have if gone to foreclosure.  
 
The investor makes money monthly from Johnny's rent. In 3 years Johnny reestablishes credit and can purchase the home back from investor if they both agree to and Johnny can qualify. Johnny buys back the house for fair market value of 80k. 
 
So it is a win for everyone. Johnny went from owing 200k to owing 80k in 3 years. The investor made money and the bank didn't lose as much. 
 
You may disagree with these numbers. BUT TRUST ME I'VE DONE MY RESEARCH. 
 
HIGH FIVE TO BANK OF AMERICA

positively received by people who have essentially run out of any more options.

Welcome to DU.

BOA is not always the devil incarnate. People here at DU think that they're always after foreclosure without realizing that this usually incurs big losses for the bank.

This sounds like they're trying to do something that's good for homeowners. Maybe it's a change of corporate heart and maybe it's only temporary but for some to simply say 'They're always evil' without looking at what's going on does no one any good who wants to understand the situation.

if you favor capitalism. Some of us (me at least) would like to see us evolve from that economic system to something more people friendly.

But given our current reality thank you for the explanation and welcome.

occupied by renters and generates steady income. The goal is just to make more money on
selling foreclosed properties.