The Anna Maria Island Sun Newspaper

Vol. 12 No. 29 - May 2, 2012

REAL ESTATE

Program rents foreclosed homes to owners

 

Most creative ideas are a result of a difficult situation inspiring an ingenious solution. There have been many proposed solutions to the housing crisis, but the most recent one may very well be the most practical.

It may be hard to believe, but Bank of America, one of the nation's leading mortgage lenders, is starting to think in a very sensible way. At the end of March, the bank announced that it has begun a pilot program offering some of its mortgage customers who are facing foreclosure a chance to stay in their homes by becoming renters instead of owners. The Mortgage to Lease pilot program is being offered to about a thousand Bank of America customers in test markets in Arizona, Nevada and New York.

Participants in the program would agree to a deed-in-lieu of foreclosure, where they essentially sign over ownership of the property to the lender. This process is less costly to the bank and also does less damage to a borrower's credit than a full blown foreclosure. In exchange, they will be able to lease their home for up to three years at or below the rental market rate as long as they demonstrate the ability to pay the agreed upon rent.

Not only will the rent be less than the participants' current mortgage payments, but customers will not have to pay property taxes or homeowner's insurance. In order to qualify for the program, homeowners must have a Bank of America loan, be behind at least 60 days on payments and be underwater, owing more on their mortgage than the property is worth.

The obvious benefit to families is not having to face the stress and humiliation of moving and relocating children to a new school, as well as the financial advantage. The bank benefits by not having to endure the cost, about 5 percent of the face value of the mortgage, and paperwork that goes along with a foreclosure. It also doesn't have to face maintaining and selling the property in a still recovering real estate market.

However, there could be a downside for Bank of America and other banks that may consider a similar program. Like any landlord, banks could face problem tenants that have to be evicted and a public relations nightmare by not offering the program to all underwater homeowners.

For the moment Bank of America plans on owning the homes with the option down the road to sell to investors. If the program is successful, it could be expanded to include real estate investors who buy qualifying properties and keep the occupants as tenants.

The government proposed a similar program through Fannie Mae called deed-for-lease, which has been on the books since 2009. However, the program is not publicized and has had little if any impact on the housing problem.

The Bank of America program shows that at least someone is thinking outside of the box. It may be a long shot, but certainly worth trying especially since it's not costing the taxpayer one cent. These are the types of programs the government should get behind and encourage with the hope that other lenders will get on board.

The phrase "Necessity is the mother of invention" has no definitive author, although Plato is suspected. What is definitive, however, is that there's always a way to make a bad situation better given a little creativity.

Real Estate Transactions
Real Estate Transfers from Feb. 16 to March 31, 2012
Sponsored by Alan Galletto Island Real Estate

Sold Date | List Price | Sold Price | Address | Provision | Property Style

Anna Maria

02/16/2012 399,000 395,000 704 Rose St. 1050 50x100 2 Br/2 Ba SFR
03/01/2012 639,000 599,625 107 Tern Dr. 2131 75x100 4 Br/3 Ba SFR
03/02/2012 1,299,000 1,100,000 804 N Shore Dr. 5462 100x100 5 Br/4 Ba SFR
03/06/2012 575,000 515,000 804 N. Bay Blvd. 2204 50x100 4 Br/3 Ba SFR
03/29/2012 435,000 410,000 730 Holly Rd. 1130 50x105 2 Br/2 Ba SFR
03/30/2012 890,000 830,000 213 Elm Ave. 2294 79x110 3 Br/3 Ba SFR
03/19/2012 235,000 215,000 416 Alamanda Rd. 57x123

Bradenton Beach

02/24/2012 269,000 235,000 2415 Avenue B 2560 50x100 4 Br/4 Ba Inc.
02/29/2012 239,900 212,000 2110 Avenue B # A 1622 25x100 3 Br/3 Ba Inc. REO/bank owned
02/28/2012 499,000 430,000 301 17th St. N. # 15 1722 3 Br/2.5 Ba Condo
03/02/2012 115,000 115,000 117 Seventh St. N. # 24 594 1 Br/1 Ba Condo, short sale
03/02/2012 179,000 155,000 2412 Gulf Dr. N. # 122 432 1 Br/1 Ba Condo
03/30/2012 229,900 210,000 400 21st Pl. 1100 2 Br/1 Ba SFR, REO, bank owned
03/19/2012 439,900 372,000 1439 Gulf Dr. N. # 27 1536 3 Br/2.5 Ba TH
03/08/2012 169,900 160,000 1303 Gulf Dr. S. # 3 613 1 Br/1 Ba Villa

Cortez

03/30/2012 221,000 212,000 4212 126th St. W. # 403 1104 2 Br/2 Ba Condo
03/30/2012 559,000 517,000 4216 Marina Ct. 2307 3 Br/2 Ba Condo
03/09/2012 895,000 750,000 12406 Baypointe Terr. 3363 4 Br/3 Ba SFR
03/30/2012 749,000 717,000 12527 Safe Harbour Dr. 2462 79x121 3 Br/2 Ba SFR

Holmes Beach

02/29/2012 335,000 310,000 5808 Gulf Dr. # 205 780 1 Br/1.5 Ba Condo
03/02/2012 439,000 410,000 5200 Gulf Dr. # 506 1169 2 Br/2 Ba Condo
03/02/2012 389,900 360,000 6006 Gulf Dr. # 214 1154 2 Br/2 Ba Condo
03/05/2012 195,000 145,000 3601 E. Bay Dr. # 204 1035 2 Br/2 Ba Condo, short sale
03/05/2012 350,000 315,000 2502 N. Gulf Dr. # 206 735 1 Br/2 Ba Condo
03/09/2012 235,000 200,000 723 Manatee Ave. # 22 1187 2 Br/2 Ba Condo
03/19/2012 329,000 290,000 3303 Gulf Dr. # 1 700 2 Br/1 Ba Condo
03/19/2012 385,000 350,000 600 Manatee Ave. # 210 1179 2 Br/2 Ba Condo
03/28/2012 189,000 181,000 6300 Flotilla Dr. # 80 1023 2 Br/2 Ba Condo
03/29/2012 239,000 225,000 102 39th St. # 7 648 1 Br/1 Ba Condo
02/17/2012 799,000 750,000 232 S Harbor Dr. # A & B 4238 4 Br/4 Ba SFR, short sale
02/17/2012 365,000 315,000 402 71st St. 2183 3 Br/2 Ba SFR, short sale
02/17/2012 324,900 290,505 5505 Gulf Dr. 1652 75x106 3 Br/3 Ba SFR, REO bank owned
02/17/2012 1,295,000 1,050,000 202 72nd St. 3813 59x105 8 Br/5.5 Ba SFR
02/22/2012 395,000 370,000 401 75th St. 1710 102x85 3 Br/2 Ba SFR
02/24/2012 549,000 525,000 127 47th St. 1650 55x100 3 Br/3 Ba SFR
02/27/2012 399,900 340,000 241 85th St. 1927 90x100 3 Br/3 Ba SFR
02/29/2012 475,000 380,000 620 Foxworth Ln. 1788 3 Br/2.5 Ba SFR
03/01/2012 554,900 520,000 601 Ambassador Ln. 2046 3 Br/2 Ba SFR
03/01/2012 649,000 649,000 304 62nd St. 2015 3 Br/2 Ba SFR
03/02/2012 649,000 618,000 118 Neptune Ln. 2353 58x114 3 Br/2.5 Ba SFR
03/05/2012 500,000 485,000 616 Dundee Ln. 1932 2 Br/2 Ba SFR
03/09/2012 425,000 400,000 7805 Gulf Dr. # 7508a 875 2 Br/2 Ba SFR
03/12/2012 649,000 619,000 626 Dundee Ln. 2565 4 Br/2 Ba SFR
03/14/2012 599,000 560,000 508 75th St. 1702 90x133 2 Br/2.5 Ba SFR
03/15/2012 799,000 775,000 307 66th St. 2600 6 Br/3.5 Ba SFR
03/16/2012 435,000 405,000 235 85th St. 1789 90x100 3 Br/3 Ba SFR
03/19/2012 725,000 775,000 307 66th St. # A 3000 6 Br/4.5 Ba SFR
03/26/2012 389,900 389,900 216 85th St. 1571 90x100 2 Br/2 Ba SFR, REO, bank owned
03/30/2012 995,000 880,000 651 Key Royale Dr 1989 3 Br/2.5 Ba SFR
03/30/2012 349,900 339,000 2711 Avenue C 1702 62x105 3 Br/2 Ba SFR
03/30/2012 255,000 255,000 215 82nd St 880 90x90 2 Br/1 Ba SFR
03/30/2012 669,000 615,000 607 Key Royale Dr. 2284 2 Br/2 Ba SFR
03/23/2012 550,000 500,000 200 52nd St. 2656 4 Br/3 Ba TH, short sale
03/30/2012 225,000 210,000 3400 Sixth Ave. # 7 900 2 Br/2 Ba TH
03/30/2012 349,900 349,900 6250 Holmes Blvd. # 54 1536 3 Br/2.5 Ba TH
03/01/2012 260,000 245,000 3004 Avenue C 150x100

Source: Manatee County Property Appraiser’s Office


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