A recent article in Bloomberg News reported that America's biggest mortgage servicer has a new trick up its sleeve. With the number of foreclosures continuing to flood the housing market, Bank of America has started programs around the country where it will "donate" hundreds of the repossessed homes, and then turn around and demolish them.
Generally, lenders dislike disposing of repossessed homes because it is time consuming and can be expensive for them. With the new "donate-detonate" program, Bank of America will be able to quickly bypass the disposal stage. By partnering with agencies that manage blighted properties, the bank sells a house at a nominal value ($1) in order to structure the deal as a transaction rather than a gift.
It may appear as though Bank of America is doing a good deed to the community, as many of the homes that will be demolished are uninhabitable or severely damaged. But behind the scenes, Bank of America may come out on top, as it will likely receive a generous income tax deduction for the fair market value of the home. The bank has plans to demolish 100 properties in Detroit and 150 in Chicago, and may add nine more cities to the list by the end of the year. The lender will pay as much as $7500 for demolition or $3500 in areas eligible to receive funds through the federal Neighborhood Stabilization Program.
Bank of America's has indicated its intention in demolishing homes is to clear a backlog caused by a soft real estate market so that the foreclosure process can speed up. However, the knockdowns are not likely to outpace foreclosures. These programs are being closely watched by other major bank, such as Wells Fargo, Citigroup, JP Morgan Chase, and Fannie Mae, who have indicated a desire to implement their own programs soon.
This is just another example of banks not doing what is in the interest of homeowners and the country at large. If you are facing a Florida Foreclosure Lawsuit from Bank of America, contact a Jacksonville Foreclosure Lawyer or a Florida Foreclosure Defense Lawyer today for a complimentary case review to determine what foreclosure alternatives may be available in your case.
