Tuesday, March 27, 2012

Foreclosure Rental Program

Bank of America is starting up a new program of taking ownership of a home that a person is unable to make payments and then renting it back. The following is my opinion on this...

EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

I first read about this from Investing Early. Some others brought it up and I wanted to give my opinion but knew it was going to be lengthy. To be clear my concerns are largely unfounded as far as facts of the program are extremely limited. But the implications of what might come up from this could be big. No doubt all the other banks are looking to see how this turns out. At best this adds one more layer of complexity for people to understand. If a large number of society failed to understand or failed to care about the implications of an adjustable rate mortgage (ARM) or interest only mortgages then there seems to be similar risk when banks start righting a foreclosure rental program into the mortgage as a requirement to get your house in the first place.
As a correction.. Nixon took the U.S. off the gold standard in 1971, not 1970.

Here is the book I mentioned, Debt: The First 5,000 years.

Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

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