The first cases of mortgage relief from a $25 billion settlement have arrived in San Diego.
Yadira Altamirano received a principle reduction from Bank of America of $305,000 off her loan balance of $640,000 on her Spring Valley home.
When she received confirmation by mail she couldn't believe it.
"I called the rep again and I said, 'Is this true? $305,000 off the principal? Is it a done deal already?' She said 'Yeah, it's approved,'" explained Altamirano.
She was told she would face a three-month trial period in which she would need to pay her $1,600 monthly mortgage payment on time, a stark contrast to the her original monthly payment of nearly $3,200.
Documents show her initial interest rate would be 2-percent and later rise to 4-percent.
The mortgage relief is part of the $25 billion dollar settlement between 49 states and five major U.S. banks: Citibank, JP Morgan Chase, Wells Fargo, Bank of America and Ally Financial.
The banks had been accused of rushing foreclosures without following legal procedures.
Mortgage counselor Ali Tarzi of Community Housing Works advised homeowners to make sure they check their mail for the documents and to be ready for a quick response.
Homeowners are required to submit a ‘hardship package’ including financial documents and other items.
"In 30 days of receiving that package, the bank will tell you 'Yes, you're going to get a modification' or 'Sorry, we can't help you,'" said Tarzi.
Those denied will also have the right to appeal the decision within 30 days.
After five years of trying to help families through the mortgage crisis, Tarzi feels the end may be near. "At least in California, with this initiative, it's working to close the door on this housing crisis," he said.
The mortgage relief is only available for homeowners who have loans serviced by the above mentioned five banks.
The office of California Attorney General Kamala Harris warns that scammers and fraudulent companies may attempt to take advantage of struggling homeowners and recommends calling the lender directly or asking the help of a housing counselor certified by the U.S. Department of Housing and Urban Development or HUD.