Recently, Bank of America has come up with a new program which is still pending regulatory approval.
Despite the fact that the plan has specifically been developed to offer relief to under pressure homeowners enjoying unemployment advantages, it has a couple of drawbacks.
In case, the homeowner fails to land a job within the period of nine months, there would be a need to provide the bank with a deed-in-lieu of foreclosure which certainly isn’t a good sign. Furthermore, the proposal won’t apply to individuals who aren’t receiving unemployment benefits. Since the self-employed individuals aren’t eligible for unemployment benefits, they can’t benefit from this program. Besides, homeowners with equity would never agree on offering a deed to the bank.
Moreover, for many people, a short sale is comparatively a much better option than a deed-in-lieu of foreclosure. How could one ignore the fact that a short sale seller is likely to purchase another house in two years whereas it takes around four years under a deed-in-lieu?
