Total Debt Forgiveness and Your Ticket to the 1%

Your ticket to the 1%?

Bank of America recently released a highly selective, pilot program (only in New York, Nevada, and Arizona at this point) called a “deed-in-lieu-for-lease” program. In other other words, this is TOTAL FORGIVENESS OF DEBT ON YOUR HOME LOAN… in exchange for title.

AWESOME, right!??! Where do I sign?!!?

The eligibility requirements are: the home owner has to be delinquent for at least 60 days, you have to have exhausted every other foreclosure alternative, you have to owe more than it is currently worth, and foreclosure must be imminent. Also, Bank of America must hold the only loan and it must be a clean title: no junior liens, no second mortgage, no Home Owner’s Association lien, no tax lien, no utility liens. CLEAN!

Okay, fair enough. Still sounds pretty good, right?!?

You cannot apply for this program. They are selecting you. And they are only selecting 1,000 people at this point. This will help less than 1/1oth of 1 percent of current homeowners that are underwater or facing foreclosure.

Don’t get me wrong. I actually think Bank of America has some great home loan programs, and my former in-house lender is with Bank of America and she is FANTASTIC. But she is not “Bank of America.” She is not a corporation. She is a human being with a heart. She is a home loan officer with certain regulations that she must follow on who she can offer home  loans to,  and up to how much.

But, I do my research, and I know how corporations and big banks work. They are not looking to help those clients that are currently underwater out of sheer kindness. They want to get the absolute most money that they possibly can. They are not human beings. They are corporations. They are banks.

So why have they initiated this program? Bank of America, like all banks, knows that when they foreclose on a home it can take up to a year to evict the homeowner, and that is a whole year in which animosity is growing, and the homeowner is not paying a cent on the mortgage. In the end, the bank is left with a trashed house, with damaged walls and rugs, stripped of it’s kitchen appliances, and filled with lingering animosity for years to come. That is not good for anyone.

So, the next option is a short sale. In a short sale the bank works with the homeowner and the realtor to sell the property for less than what is still owed on the property. The homeowner ultimately saves most of their credit, has a bit more time to prepare for a move, and is less aggravated, and less likely to damage the property when they do leave. However, the bank still takes a loss on the property.

So here is the new option. They will choose 1,000 people for the “mega millions lottery of real estate” and forgive their debt, AND allow them get to stay in their home for up to three years.  While they are allowed to stay, they will be paying the bank rent to stay there. So, that is three years where the Bank ofAmerica will be collecting money, most likely equal to what the mortgage payments were, or very close. The owner gets to stay in the property and maintains it for up to three years, at which point they move out peacefully with little or no animosity, and little or no damage done to the house, and then the Bank of America completely owns the property.

Okay. Still sounds relatively fair. Everyone kinda gets what they want n the end, and I think it’s a start of yet another option for Americans to keep their homes, at least for three more years, while they struggle to get back on their feet.  But here’s the rub, and your new ticket to 1%, if you pay attention.

As an insider in the market, this is an indication to me that Bank of America believes that the income property and rental market is where the money is RIGHT NOW,… but at the end of three years, when Bank of America will completely own these properties, damage free,  they will plan to sell these properties FOR A TON MORE. Bank of America knows that the market has nowhere to go but up, and in three years… it will be time to sell.

You want to be in the 1%, you have to think like the 1%. Who wants to buy to buy some income property? Call me today to purchase your ticket. 310-722-5959.


About Lawrence Chaves

Lawrence Chaves Keller Williams Beach Cities BRE# 01893036 Member of the South Bay Association of Realtors, California Association of Realtors, and National Association of Realtors. Specializing in residential and income properties in the South Bay and Beach Cities of Los Angeles County. 1st time buyers & new to the South Bay are welcome. Taking appointments now. 1601 Pacific Coast Hwy Ste. 265 Hermosa Beach CA 90254 Phone: 310.722.5959 Email: Website:
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