Washington, D.C. – Rep. Raúl M. Grijalva today hailed a new Bank of America pilot program that will offer a small number of customers facing foreclosure the option to remain in their homes as renters for up to three years. The program closely mirrors his Right-to-Rent Act, introduced last year and in previous Congresses, that would let families facing foreclosure rent their homes for up to five years at a fair market rate set by a judge.
Nearly half the homes in Arizona are underwater, meaning they are worth less than the owners are paying on the mortgage.
“The ongoing mortgage crisis – especially in communities like ours in Arizona that have been hit the hardest – has been a huge obstacle to a serious economic recovery, and I thank Bank of America for doing something right to help fix it,” Grijalva said.“I’m confident this program will succeed, and I hope to see it expanded all over the country.”
This benefits of Right-to-Rent include allowing children to continue attending the same school; maintaining property values in what could otherwise be high-foreclosure, high-vacancy neighborhoods; and providing families adequate time to transition to a more permanent situation or potentially repurchase the home when the economy improves.
Lenders like Bank of America have started to see the benefits of a Right-to-Rent approach because vacant properties are not usually well maintained, and incurring cleanup costs only to sell a home in a depressed market virtually ensures large losses for lenders. Keeping families in their homes ensures that lenders continue to receive regular rental payments and can often look to resell the home – to the current family or another buyer – at a significantly better price than what they could get for a long-vacant unit.