BofA Selling REO to State, Local Governments

Bank of America‘s (BAC) home loan business segment will sell foreclosed and bank-owned properties to municipalities as part of its effort to “stabilize communities hardest hit by foreclosures,” according to an announcement Wednesday. State and local governments receiving grants through the US Department of Housing and Urban Development‘s Neighborhood Stabilization Program (NSP) may now purchase BofA’s real estate-owned (REO) properties. The new procedures allow municipalities to purchase foreclosed properties for resale to home buyers or for other community development needs. BofA now offers NSP grant recipients the opportunity to review its REO properties before the bank lists them publicly. BofA’s new guidelines give grant recipients the chance to purchase multiple properties in a single transaction. They also provide the municipalities with extensive listings of BofA’s REO properties. “Helping our customers stay in their homes is a top priority for Bank of America,” said Steve Bailey, a national servicing executive at BofA, in a media statement Wednesday. “However, where unemployment or other situations have made sustaining mortgage payments impossible, and foreclosure inevitable, we are working with communities to help ensure these properties do not negatively impact surrounding home values.” Write to Diana Golobay. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.