A statewide mortgage agreement between California's attorney general and three of the nation's largest banks has brought more than $235 million in mortgage relief to Fresno County homeowners, according to a new report.
Another $154 million in relief — for reductions in first- and second-mortgage loans and short-sale transition assistance — has gone to homeowners in Kings, Madera and Tulare counties, the California Monitor said in its Sept. 24 report, titled "By the Numbers: Mortgage Relief Report Across California."
For the first time since the California Agreement was made early last year, the program monitor released a county-by-county report showing how Bank of America, JPMorgan Chase and Wells Fargo have helped troubled homeowners.
The result: the banks have provided $18.4 billion in mortgage relief statewide in just one year. That's 50% more than the $12 billion requirement over three years.
"That is a little bit of a surprise," said John Shore, executive director of the Community Housing Council of Fresno, a nonprofit housing counseling agency. "I would think the banks would get to their quota and shut the program down. They probably in all honesty didn't know they were over that quota. This industry is so crazy that it's hard to keep up with numbers."
The state agreement is separate from the $25 billion National Mortgage Settlement reached early last year between a coalition of attorneys general and the major banks over foreclosure abuses.
California Attorney General Kamala Harris negotiated the side deal with a focus on helping California homeowners reduce what they owed on their loans.
"We're all very pleased that the banks have provided 50% more relief than they promised in about half the time they were supposed to do it," said Jennifer Song, the attorney for the California monitor's office.
The agreement required the banks to focus on helping homeowners reduce their principal mortgages. Statewide, the average principal reduction on first mortgages was $137,280 which brought many mortgages down to their current house value, the report said.
The banks also made significant second-mortgage principal reductions by an average of $90,000 or eliminated them completely.
"That gives families a fair shot to not only keep their homes but to begin to build equity and increase their net worth," the report said. "It gets families out from unaffordable and underwater mortgages and makes homeownership a wealth-building opportunity."
Homeowners whose mortgages could not be reduced were given transition assistance money — $9.2 billion statewide — to complete a short sale on their home and move.
In Fresno County, 2,781 loans were reduced. Bank of America led the pack, lowering first mortgages in the county by $24.6 million.
The average first-mortgage reduction in Fresno County was $86,739 while second mortgages were lowered by an average of $58,905.
"First mortgage reductions I would have guessed averaged about $35,000," Shore said.
In Kings, Madera and Tulare counties, a total of 1,872 loans were reduced. Madera saw the highest average first-mortgage reduction at $101,089 while the reductions in the other counties were similar to Fresno's.
On short sales, Fresno County homeowners received $124.8 million in assistance. While the goal of the agreement is to lower mortgages so that families could remain in their homes, not all houses could be saved.
Century 21 M&M Realtor Travis Takeuchi was surprised to hear that banks shelled out that much to help homeowners in a short sale.
"When I was seeing the high point of short sales, they were giving huge amounts of money; then things started changing this year," said Takeuchi, who specializes in short sales.
Only 40% of the 1,200 clients who seek help at the Community Housing Council every year actually receive some sort relief, Shore said.
The numbers "sound pretty good to me," he said. "That tells me that there's a lot of homeowners who probably had success on their own" without the help of a counseling agency.
The reporter can be reached at (559) 441-6495, firstname.lastname@example.org or @bonhialee on Twitter. Read her Real Estate Blog at news.fresnobeehive.com/real-estate