Sunday, January 21, 2018
Business

The Nation's Housing: 7

Testing a tool to fight foreclosure

WASHINGTON — If you're seriously under water and headed to foreclosure, what would you say if the lender suddenly offered you the chance to remain in your home as a tenant for an extended period plus have your mortgage debt wiped away? Would you say yes?

Or would you instead conclude: Hey, why pay rent? It's going to take the bank more than a year to complete the foreclosure and evict us, so why not just stay put and save some money?

One of the country's largest banks is about to find out which choice significant numbers of distressed owners make in response to a new foreclosure-avoidance plan it calls "mortgage-to-lease." Bank of America is sending proposals later this month to upwards of 1,000 customers in Arizona, New York and Nevada. If the reaction is positive, the program is likely to be expanded to other states, and could become a model for the biggest players in the mortgage market — Fannie Mae and Freddie Mac.

Here's how it works: The homeowners in the initial pilot tests all have been previously offered a variety of possible alternatives to foreclosure — loan modifications, forbearance on payments, short sales and "deeds-in-lieu," where the borrower hands the property title back to the bank and moves out. But they either have not been able to qualify or have not responded to the bank's proposals. They're now essentially at the end of the line — there are no other standard lender remedies available to keep them out of foreclosure. In fact, most lenders are now speeding up the pace of foreclosures to get heavy loads of defaulted mortgages off their books.

In the mortgage-to-lease plan, borrowers are expected to deed back their homes to the bank and in exchange get multiyear lease terms at or slightly below the going market rent for their unit — provided they have monthly income to make the payments. There is no built-in guarantee that at the end of three years, they will have a shot at repurchasing their home.

Bank of America officials readily acknowledge that they are unsure how many homeowners will take them up on their offer. "This is an experiment — we just don't know," said Dave Steckel, the bank's home retention strategy executive. It's entirely possible, he concedes, that some owners will simply choose to proceed to foreclosure.

Though Bank of America has not discussed details of the plan with foreclosure-prevention and homeownership advocates, leaders of some groups had generally positive reactions to the core concept.

Where is this all headed and how fast? If pilot projects go well, and consumers are enthusiastic — both of which are uncertain — look for mortgage-to-lease to spread to other large lenders, and potentially become a new tool in the national foreclosure-avoidance effort.

Kenneth R. Harney can be reached at [email protected]

Comments
Sheriff Bob Gualtieri severs contract with CareerSource Pinellas

Sheriff Bob Gualtieri severs contract with CareerSource Pinellas

Pinellas Sheriff Bob Gualtieri severed his agency’s contract with CareerSource Pinellas on Monday after learning that the jobs center told the state it helped 624 sheriff’s employees get hired since 2014.The sheriff said he has no record of CareerSou...
Updated: 3 hours ago
Water Street Tampa sketches vision for Marriott Waterside (with video)

Water Street Tampa sketches vision for Marriott Waterside (with video)

TAMPA — Water Street Tampa developers outlined some broad goals for their planned $40 million renovation of the Tampa Marriott Waterside Hotel & Marina in a video posted to social media on Monday.In short, they want a hotel that feels inclusive, not ...
Updated: 7 hours ago
Solar industry on edge as Trump weighs tariffs on panels

Solar industry on edge as Trump weighs tariffs on panels

Associated PressDALLAS — Some in the U.S. solar-power industry are hoping a decision this week by President Donald Trump doesn’t bring on an eclipse. Companies that install solar-power systems for homeowners and utilities are bracing for Trump’s call...
Updated: 10 hours ago
Tampa Bay ranks No. 5 for top moving destinations

Tampa Bay ranks No. 5 for top moving destinations

TAMPA — Tampa Bay was the No. 5 moving destination in 2017. Penske Truck Rental’s annual list ranks metro areas based on the number of one-way moving truck rentals to them.The Tampa Bay region, which includes Sarasota, held its position from 2016. It...
Updated: 10 hours ago
Free clinics respond as more people head to the ER with dental problems (w/video)

Free clinics respond as more people head to the ER with dental problems (w/video)

Charles Lee had been dealing with an excruciating toothache for days. The pain made it hard to eat or sleep or focus on work. But Lee, 54, didn’t have dental insurance. His job as a delivery truck driver offered only a supplemental policy that was to...
Updated: 10 hours ago
Fur and fury at 40,000 feet as more people bring animals on planes

Fur and fury at 40,000 feet as more people bring animals on planes

When Marlin Jackson arrived at his row on a Delta flight from Atlanta to San Diego in June, the middle seat was already occupied by a man with a sizable dog on his lap. Jackson squeezed by them to his window seat, and the Labrador mix lunged at his f...
Updated: 11 hours ago
Teens who spend less time in front of screens are happier - up to a point, new research shows

Teens who spend less time in front of screens are happier - up to a point, new research shows

In recent months, Silicon Valley executives have been speaking out about the purposely addictive designs of smartphones and social media, which make them hard to put down for anyone, but particularly teenagers. Now, a new report puts numbers to the w...
Updated: 11 hours ago
Sirata Beach Resort is getting a $15-million facelift

Sirata Beach Resort is getting a $15-million facelift

ST. PETE BEACH — A year ago, the longtime owners of the Sirata Beach Resort & Conference Center acknowledged they couldn’t afford the improvements it needed. They sold the 382-room hotel to a Texas company.Now the new owner has launched a $15 million...
Published: 01/22/18
This is how MoviePass hopes to make money off your low-cost subscription

This is how MoviePass hopes to make money off your low-cost subscription

MoviePass is a film nerd’s dream. The subscription service allows users to see one movie a day at a theater for a single monthly cost. The service isn’t new, but it’s become popular among a lot more than movie buffs in the past few months.During its ...
Published: 01/22/18
Florida pump prices jump 10 cents, highest in four years

Florida pump prices jump 10 cents, highest in four years

Gas is off to an expensive start this year — the most expensive start since 2014. Florida pump prices jumped 10 cents in the past week to hit $2.54 per gallon Monday, 18 cents more than last month, according to AAA The Auto Club Group. Tampa Bay gas ...
Published: 01/22/18