After suffering some of the biggest losses from the housing crash, Californians are getting the lion's share of a $46 billion nationwide settlement from top mortgage lenders.
Troubled California homeowners should get nearly $20.6 billion from the year-old national settlement, according to a report released Thursday.
California's share represents about $2 billion more than originally expected, said Katherine Porter, a law professor who is overseeing the statewide distribution of benefits for Attorney General Kamala Harris.
Five big mortgage servicers Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo entered into a nationwide settlement last year over charges of lending and servicing abuses. In a report released Thursday, national settlement monitor Joseph Smith Jr. said consumers have already received more than $42.3 billion in various forms of relief. He said the total payout should hit $46 billion.
The huge sum being distributed in California is partly a reflection of how hard real estate prices collapsed when the housing bubble burst, said Porter, a professor at the University of California, Irvine.
"We do have a relatively high fraction of people who are underwater and delinquent," she said.
But she said other factors are at work, too. Harris has cut a separate deal with three of the lenders Wells, Chase and BofA to create additional benefits. The state's "homeowner bill of rights," which became law Jan. 1, gives consumers additional tools with which to stave off foreclosure. In addition, Californians have done a good job of simply being alert when offers of assistance arrive in the mail from their mortgage firms, she said.
"These offers are real, they're coming," Porter said. "Open your mail, keep your home."
Nearly 175,000 California homeowners have received assistance through the national settlement so far. More than half of those homeowners have received principal reduction or had their second mortgages usually home equity lines of credit erased entirely.
She said erasing second mortgages is a huge boost to many homeowners. Not only do their monthly payments decline, they have an easier time negotiating with lenders on their primary mortgages.
For assistance, Porter urged homeowners to visit the state's settlement website, www.californiamonitor.org, and click on the "Are you eligible?" tab at top of the home page.