Foreclosure prevention

Nevada -- particularly Southern Nevada -- remains Ground Zero in the foreclosure debacle. As of February, one of every 278 households here had received a foreclosure-related filing. That's twice the national average.

It is with some optimism, then, that we note Nevada will be one of three states to participate in an experimental program launched by Bank of America this week to keep some struggling families in their homes and help stabilize the market.

Under the Mortgage to Lease program, qualified homeowners who can't make the monthly payments will turn over the deed to their homes to the bank rather than face foreclosure. The bank will then forgive the mortgage debt and allow the party to rent the home at below-market rates for up to three years, with no property tax or homeowner insurance costs.

Not only does this have the potential to keep people in their homes, it saves the bank from having to go forward with an expensive, time-consuming foreclosure process, and it could also slow the neighborhood deterioration that occurs when residents simply walk away from their property.

Only 1,000 people in Nevada, Arizona and New York will participate in the pilot program, but expansion is likely if it succeeds. In order to qualify, Bank of America officials say a homeowner must be underwater on the house, more than two months late on payments and have exhausted all other loan modification remedies.

One potential conundrum: Rather than sign up for this alternative, many delinquent homeowners will decide to do nothing and stay in their residences payment-free for the two years it typically takes the foreclosure process to run its course.

But if Bank of America can persuade enough homeowners to take this alternative path, Mortgage to Lease has the potential to help this community recover.