California gets $18 billion as part of the deal. The money will be used to help people refinance their mortgage loans and to send checks to victims of abusive foreclosure practices.
The Valley has been ground zero for the US housing crisis. Under the settlement a million homeowners who owe more on their houses than they're worth will have their debt reduced by lenders.
John Shore of the Community Housing Council said homeowners who have been turned down for refinancing can re-apply.
Shore said, "First of all, with your principal being reduced and being able to refinance under the HARP program you'll not only have a smaller loan balance but a lower interest rate so the impact can be huge."
But loan officer Paul Salazar of California Funding explained not all homeowners will qualify.
Salazar said, "These loans are for only for people who have bank owned loans., meaning the majority who have Freddie Mac and Fannie Mae loans, those loans were not included in the settlement."
750 thousand Americans who lost their homes in the last three years due to improper foreclosure practices will get a check for about $2,000.
"I believe that it is a little bit too late," said Salazar. "These people are already misplaced. They've lost their homes. This is not going to give anybody their home back."
But state Attorney General Kamala Harris called the deal one piece of a broader focus.
"It is about reforming the rules," said Harris. "It is also about stabilizing these homes, getting relief to them as quickly as possible."
Harris said the settlement also makes banks more accountable.
"When somebody gets behind on their payment the first person that calls them from the bank isn't there to help them," said Shore. "That person is nothing more than a bill collector and those people get rude and crude."
Kamala Harris says it will take 120 days for people to see any mortgage relief. If you have questions, places like the Community Housing Council offer mortgage help for free.
(559) 221-6919
Ally/GMAC: 800-766-4622
Bank of America: 877-488-7814
Citi: 866-272-4749
JPMorgan Chase: 866-372-6901
Wells Fargo: 800-288-3212
