NEW YORK (
Bank of America
is getting in the landlord business.
The Wall Street Journal
, the company
on Thursday that involves homeowners behind on their mortgages signing over their properties to the bank and then leasing the homes back at market rates.
The program, an effort by the bank to creatively confront the backlog of foreclosures it faces, was launched on a small scale, the
said, with Bank of America sending letters to 1,000 homeowners in Arizona, Nevada and New York.
Bank of America shares closed Thursday at $9.60, down 2.2%, but the stock has been the best performer in the
Dow Jones Industrial Average
in 2012, rising more than 76%; although it's proven unable to hold intraday gains and close above $10 this week.
in a press release, saying the effort is a pilot program called "Mortgage to Lease" and that it's being conducted "strictly on a solicitation basis; there will not be any opportunity for customers to volunteer or apply for consideration."
"This pilot will help determine whether conversion from homeownership to rental is something our customers, the community and investors will support," said Ron Sturzenegger, an executive at Bank of America. "This program may have the potential to further round out the broad set of solutions we offer our customers in need of assistance."
Bank of America said customers invited to participate in the program must meet a number of requirements, including being delinquent on their loans for more than 60 days, having no junior loans on the mortgage, and be facing "considerable risk of ultimate foreclosure."
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Written by Michael Baron in New York.
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