Bank of America, the leading US bank in the mortgage industry is also the number one bank that now owns a ton of foreclosed property.
The bank’s problem has been compounded by the fact that depressing financial conditions is making it very difficult for a large number of people to buy homes and as such, the bank has been left with a huge pile of these homes that are fast deteriorating and further sending property values down.
Just like Fannie Mae, Bank of America has been exploiting ways by which it can get rid of the large backlog of foreclosed homes in its possession. It has been found that as the large numbers of delinquent homeowners are foreclosed, the rate of the country’s housing surplus increases thereby preventing a situation where the housing sector will recover from its slump.
In spite of the fact that there are a lot of previously owned homes on the market as a result foreclosure, short sale or bankruptcy, (which has helped to pull down home prices as well as mortgage rates) many people are left without the ability to purchase homes.
The reason that has been advanced for this observation is the fact that many of those who are currently in need of a home have just undergone foreclosure and as such do not qualify for a home loan anytime soon. Another reason is that the Dodd Frank Financial Reform has made it a lot harder to acquire mortgage loans compared to the days preceding the mortgage and housing sector downfalls.
Since these people cannot own a home but still have to meet their housing needs, there is no other option than for them to turn to rental property. The huge demand for rental property has also caused rental charges to sky rocket making it very expensive for homeowners (most of them are not in the best of financial shapes) to satisfy one of the basic needs of all humans- the need to acquire shelter.
It makes no sense that a large number of homes have been taken over by banks and other mortgage lenders thereby leading to the destruction of these properties yet, many people are paying huge sums of money to rent homes.
Bank of America has decided to package these foreclosed homes and then sell them out to investors who might be interested in purchasing these properties. The bank has already carried out a first successful sale of such homes a couple of months ago and has announced an intended sale of about 500 single family homes sometime this year.
Interested parties have up to the end of May to send their bids to Bank of America. The advantage of participating in this program is that the investors can obtain the homes at a very cheap price and then rent them out to make profit.