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$18 million in mortgage settlement relief for California

Mortgage Relief

In the past year and a half, California homeowners have received more than $18 billion worth of help from a national mortgage settlement with major lenders.

The state’s share of the settlement was divided evenly between principal reductions and short sales, and it includes more than $2.8 billion to residents of Alameda, Contra Costa, Santa Clara and San Mateo.

The agreement penalized the lenders for something called “robo-signing” where  bank employees fraudulently signed foreclosure paper work, as well as misconduct in loan servicing, and was limited to loans owned or serviced by those lenders.

The $25 billion national settlement was with the attorneys general of nearly every state, but California Attorney General Kamala Harris negotiated a separate version of this agreement with three different lenders. This increased the amount of help ,which went directly to homeowners. Under California’s agreement, only mortgage help that reduced what homeowners owed could be counted as credit in California’s share of the settlement.

As a result, 84,102 California families received first and second mortgage principal reductions. Bank of America delivered $11.16 billion and  forgave second mortgages in full for over 36,000 California homeowners. JP Morgan Chase $4.07 billion and Wells Fargo $3.2 billion.

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