How can you write “innovation” and “bank” in a headline and have it be a positive statement? Often a bank innovating means they are looking for loopholes in regulations to drive huge profit. But, sometimes you see some good intention and a market need being filled.
Here is a feel good story about Bank of America and their announcement of an effective way to make some money AND help their customer base who are struggling with their underwater mortgage situations.
Last month the bank announced the “Mortgage to Lease” program. Participants will transfer their home’s title to the bank, which will then forgive the outstanding mortgage debt. In exchange, they will be able to lease their home for up to three years at or below the rental market rate.
The rent will be less than the participants’ current mortgage payments and customers will not have to pay property taxes or homeowners insurance.
Look, there is no question that a bank the size of Bank of America will put profit first, always. But, this is at least a progressive solution for customers who are struggling, and who would likely be better off to rent in the long-term anyways.
We are still living in a time of tremendous economic turmoil, and in order to create growth businesses need to shift their thinking in how they will go about doing it. From focusing on creation of demand for its current stable of products to a place where they look to and understand the market to see what it will bear.
For a full read please visit MSNBC.com