WASHINGTON (WUSA) -- A new pilot program could help some homeowners facing foreclosure or bankruptcy. It's called Mortgage to Lease.
In this program, rather than foreclosing, the bank takes back ownership, forgives the debt, and gives the homeowner a chance to rent. You lose your equity, but one desperate homeowner reduced her monthly payments from $1,250 to $712, and she gets to stay in the house.
Bank of America is rolling out the small test program to 2500 distressed homeowners in four states. Citigroup introduced a similar program for 500 homeowners in six states.