Sometimes an idea is so good, you have to wonder why no one thought of it earlier. Case in point: Bank of America saying it will allow some distressed homeowners to avoid foreclosure by handing over the title to their property, have their debt forgiven and then remain under the roof as renters.
The bank says it will test the program with about 1,000 homeowners in New York, Nevada and Arizona. If it works well in those places -- and why wouldn't it? -- it could be expanded elsewhere.
"When homeowners are struggling to make payments, owe more on their mortgage than their home is worth and face certain foreclosure, one of their greatest anxieties is the transition process they face in moving from their home," says Ron Sturzenegger, a BofA spokesman.
Not all people with BofA (or former Countrywide) mortgages would be eligible. Most of the 9 million or so mortgages serviced by the bank are held by other investors like Fannie Mae. BofA owns about 1 million mortgages, and those are the ones that will be considered for the program.