Bank of America's mortgage honchos have launched a promising pilot program that avoids foreclosures, allows owners to stay in their homes, costs the government nothing, saves the bank money -- and, as a bonus, could slow the decline of neighborhoods hit hardest by the mortgage bubble. I've got only one question: The approach has been kicking around since the Depression and was resurrected by Dean Baker of the Center for Economic Policy Research way back in 2007. Why did it take so long to make it to prime time? Actually, I've got a second question: If this is really as good an idea as it appears, why wasn't it championed by the Obama Administration?

The idea is pretty simple. Bank of America is going to allow selected owners in Arizona, Nevada and New York who are hopelessly behind on their mortgages to rent their houses at market rates (or below) for three years in return for handing over the deeds. The bank wins because it avoids the stiff costs of foreclosure and will be able to collect some income from properties that are virtually unsellable. The in-arrears owners win because they get to stay in the places where they have jobs and their kids go to school. And everybody wins because the houses in question cease to be a drag on local property markets -- nobody, after all, want to buy in a neighborhood full of unoccupied, foreclosed houses.

So why has it taken this long for banks to try the approach? Perhaps they worry that offering the plan to some owners would put them under pressure to offer it to all. Perhaps they fear that giving ex-owners the right to stay as renters for a few years would morph into de facto squatters' rights. Perhaps the banks just didn't like the potential loss of flexibility in disposing of foreclosed property.

Whatever the reason, it's about time. A tip of the hat to Dean Baker for a good idea too long neglected.