Bank of America Donating Foreclosed Homes



Bank of America is donating -- and in some cases bulldozing -- some of its foreclosed houses, according to Boston.com. The paper reports that the bank will donate 100 Cleveland-area homes located in communities eligible to receive grants from the federal Neighborhood Stabilization Program.

The lender is not being purely charitable, though: The giveaways actually help the bank more than they hurt it. By ridding itself of the dregs of its foreclosed homes, the bank foregoes the hassle and cost of selling them.

It makes financial sense when you think about it: There are many costs to selling a foreclosed home. One biggie is upkeep. Abandoned homes deteriorate quickly and are vulnerable to a range of value-killers like infestation and vandalism. This susceptibility is illustrated by the mold epidemic blighting foreclosed homes across the country, which NPR reported about recently.

Banks are not in the business of selling houses, and now they're cutting the worst ones loose. So bid adieu to the 100 shoddiest digs in the Cleveland area.

Also see:
The Most-Expensive Bank-Owned Home in America

Protesters 'Liberate' Foreclosed Homes
House Can Be a Drag on Job Seekers


For more on
foreclosures and related topics, see these AOL Real Estate guides:

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Michelle Arnold

In a lot of cases this makes good business sense. Forclose on defaulting homeowners, bank collects PMI benefits, then donates poperty to local jurisdiction and bank collects tax incentives for charitable contribution. At the end of the final transaction the bank is probally slightly ahead; which is good for stock holders and mutual fund owners. ie good for every person who is planning for retirement in some way shape or form.
It seems like the other comments dont seem to realize that its just business. We live in a capitalist society and want to reap the benefits of earning a great wage with low cost basis but when Business reaps the same benefits the general populas is in a uproar.

August 03 2011 at 10:43 PM Report abuse rate up rate down Reply
sharp303

Why didn't they give the homeowners a break and help them to stay in their homes and catch up on the payments. What they are doing is not charitable at all, they are looking out for themselves and the bottom line.

August 02 2011 at 7:02 PM Report abuse rate up rate down Reply
Sheila

This is crazy nice to donate a house but why throw out reginal owner out instead of giving them time to get back on their feet,like only paying their taxes and insurance few years and that way no one looses well no wonder banks asked money to goverment to bail them out but they dont give homeowners a break to find a job and pay his mortgage again.Well Bank of America what do you expect

August 01 2011 at 9:16 PM Report abuse rate up rate down Reply
JLS

Nice IF it's true. I doubt it because it's B of A....

August 01 2011 at 8:00 PM Report abuse rate up rate down Reply
capsec250

ALL banks would benefit if they GAVE those homes to the orginazation called " HABITAT FOR HUMANITY " That way they get re-modled as needed and go to low income people with kids that cant afford to buy a home to raise their famlies in . That way EVERYONE benefits .

August 01 2011 at 7:52 PM Report abuse rate up rate down Reply
Diana

M.F.'s could have worked with the owners to lengthen their mortgages or rework the structures of their loans at a lower rate if they could make their payments. Too many houses were swept away from homeowners who were told by the banks that they wouldn't work with them until they were three months in the rear. The banks instead of working with them, they foreclosed. Yayaya some never should have had the loans but many could have stayed and needed help to stay in homes that they bought many years before. No give aways... Just a few months repreve and reorganization of payments would have helped those people and our ecomomy.

August 01 2011 at 7:45 PM Report abuse +1 rate up rate down Reply
DawnellDaugherty

This will be a feeding frenzy for investors. They will get these houses for nothing,and hold onto them to get top dollar.

August 01 2011 at 7:39 PM Report abuse rate up rate down Reply
denisehh3

Hmmmm..........donate one to me!

August 01 2011 at 7:33 PM Report abuse rate up rate down Reply
DawnellDaugherty

If they had planned this all along,then why did they wait so long to do this? They could've just giving the homes to the home owners. UNBELIEVABLE!!!!!!!!!!!!!

August 01 2011 at 7:30 PM Report abuse +3 rate up rate down Reply
shendela

I do not understand. Who or what exactly are they donating to? Habitat for humanity, the city? And who decides who gets to move in and if they have to pay anything. You dont get anything for free so maybe some charity gets to SELL them.

August 01 2011 at 7:23 PM Report abuse rate up rate down Reply