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Home › Forums › Other › Looks like “pigglords” will have competition from Bank of America….Since they are getting into the renting business…

Viewing 11 posts - 1 through 11 (of 11 total)
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  • March 23, 2012 at 5:58 AM #19632
    Coronita
    Participant

    Looks like B of A is getting to the rental business…..Sort of…They’re might be a lot of foreclosures, but it seems like the strategy is going to be sold in bulk to private equity investment groups…
    Which probably means average joe mainstreet, if this works, is going to get shut out from a “tsunami”…..

    That 50% off beachfront property isn’t going to happen imho…At least not to mainstreet people like you and me.
    A private equity firm or big institution might get 50% off, but they certainly wouldn’t turn it around and sell it to you and me for 50% off…

    Wall Street 1, Main Street 0

    Like I said, don’t hold your breath for that tsunami..Because there is always someone that has more money than you…


    http://finance.yahoo.com/news/bank-america-tests-rental-program-122201326.html

    Bank of America Tests Rental Program as Alternative to Foreclosure

    Bank of America said Thursday that it would offer a small number of customers facing foreclosure the option to remain in their homes and rent the property instead. The program highlights how investors are increasingly interested in becoming landlords on troubled properties.

    Under the terms of the pilot program, which will be offered initially to about 1,000 consumers only in New York, Nevada and Arizona, homeowners will give up the title to their property in exchange for bank forgiveness of their mortgage debt. They would then be able to rent the property for up to three years.

    The rent payments would be less than the monthly mortgage payment and be set at or below market rates, according to bank officials.

    At first, Bank of America would retain ownership of the properties before selling them to outside investors. If the pilot program, known as Mortgage to Lease, is successful, the bank could expand it.

    A wide variety of institutional investors, including some large private equity firms, are weighing potential deals in the beaten-down housing market. Bank of America’s move could offer up potential properties for investors who are looking for opportunities.

    March 23, 2012 at 7:20 AM #740401
    The-Shoveler
    Participant

    Freddie & Fannie mae have much the same plan starting in April.

    WallStreet/DC 2
    main street 0

    March 23, 2012 at 8:03 AM #740403
    sdrealtor
    Participant

    My expectation would be not so much around here. There are places in this country where it is tough to give houses away. This isnt one of them. They shouldnt have a problem selling them at retail. If they do this it would be a big time give away to wall streeters.

    March 23, 2012 at 8:27 AM #740404
    SD Realtor
    Participant

    Agreed with sdr. However this is not news or at least not unexpected. These programs have been in the works for quite awhile now and I believe I posted awhile back about the roll out of this sort of stuff. Don’t forget about increased bulk sales either.

    What will be interesting here is to see if the purchase opportunities even trickle down to the individual investors regardless of where the sales are at.

    My bet is… mostly no.

    Bigger money or groups that pool money together for bulk purchases will be positioned well.

    March 23, 2012 at 8:37 AM #740407
    outtamojo
    Participant

    “Under the terms of the pilot program, which will be offered initially to about 1,000 consumers only in New York, Nevada and Arizona, homeowners will give up the title to their property in exchange for bank forgiveness of their mortgage debt”

    Seems like a better way to get out from an underwater home than short sale or just leaving. Might unchain those stuck underwater in God forsaken places so they could come back to the big cities looking for jobs.

    March 23, 2012 at 10:11 AM #740414
    Coronita
    Participant

    [quote=Nor-LA-SD-GUY2]Freddie & Fannie mae have much the same plan starting in April.

    WallStreet/DC 2
    main street 0[/quote]

    And that’s where I have a big problem with this entire “tsunami of foreclosure” argument that some people have mentioned before. If banks are going to be packaging up these homes and selling them in bulk to private equity and investment firms, yeah institutional money might be able to get them at 50% off, but they certainly aren’t going to be selling them at retail for 50% off.

    Government might be dumb and not properly value properties. Banks might be dumb in that they have too many properties to properly value things. But private equity certainly isn’t going to be *that* dumb.

    And once these banks start shifting ownership to institutions, then these institutions (presumably with cash reserves/etc) can then hold onto them, essentially controlling inventory… I mean, p.e. firms aren’t going to be selling these at firesale prices either….

    So, me thinks common mainstreet is going to get shut out.

    March 23, 2012 at 10:11 AM #740419
    paramount
    Participant

    If your underwater on the rental, now more than ever it makes even more sense to just walk.

    March 23, 2012 at 10:12 AM #740421
    Coronita
    Participant

    [quote=paramount]If your underwater on the rental, now more than ever it makes even more sense to just walk.[/quote]

    How so? I don’t see it that way

    March 23, 2012 at 10:15 AM #740422
    an
    Participant

    [quote=paramount]If your underwater on the rental, now more than ever it makes even more sense to just walk.[/quote]
    But is that underwater rental cash flowing? If it is, then why walk?

    March 27, 2012 at 12:40 AM #740589
    CA renter
    Participant

    [quote=sdrealtor]My expectation would be not so much around here. There are places in this country where it is tough to give houses away. This isnt one of them. They shouldnt have a problem selling them at retail. If they do this it would be a big time give away to wall streeters.[/quote]

    And that is exactly the problem. Not only here, but in many places where these bulk sales are going to take place have no shortage of buyers.

    It is a total scam designed to enrich the 1% at the expense of the 99%…again.

    March 27, 2012 at 7:51 AM #740598
    Diego Mamani
    Participant

    [quote=paramount]If your underwater on the rental, now more than ever it makes even more sense to just walk.[/quote]
    These properties are not rentals… yet. They are residences. It makes sense for the borrower to not walk: S/he gets a reduction in principal, gets to stay in the house, and rent will be lower than the mortgage payment they used to make.

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