The jackpot of a lifetime arrived last month inside a letter from GMAC Mortgage: an offer to make more than $200,000 in debt instantly disappear.
The lender, the letter said, would slash what the homeowner owed to ribbons, including shrinking her $204,000 mortgage principal to about a third its size.
Far be it from a hoax, the letter was one of thousands sent to homeowners across the country. The offers, free and unsolicited, proved nearly impossible to resist.
"When they first came across, I thought they were certainly a scam," said St. Petersburg foreclosure attorney Matt Weidner. "The next thing I thought was, where's mine?"
For legions of troubled homeowners, it's nearly the same as winning the lottery: mortgage principals, sliced and diced, with little paperwork and instant action.
Already the offers have shaved more than $115 million from Florida mortgage principals. Since March, more than 1,000 borrowers across the state learned their principals were dropping by an average of $114,000.
Credit the National Mortgage Settlement, the $25 billion foreclosure agreement between attorneys general across the country and five of the nation's largest banks.
Investigated during the "robo-signing" scandal for pushing faulty documents to foreclose and repossess homes, the country's largest consumer financial protection settlement in history put banks on the hook for billions in direct homeowner relief.
That money, including $8.4 billion going toward Florida homeowners, is being paid out through modifications on monthly mortgage payments, home refinancings and cash incentives.
But it's the prized principal reductions, the Holy Grail of mortgage relief, that is turning so many heads, as homeowners see their swollen mortgage costs shrink through little work of their own.
The settlement has already quashed $1.3 billion in mortgage principals across the country, an independent monitor reported Wednesday. Short sales, refinancing and other consumer relief accounted for another $9 billion.
In Florida, the five banks — Ally Financial, Bank of America, Citigroup, J.P. Morgan Chase and Wells Fargo — have allowed for $1.7 billion in relief to more than 23,000 borrowers through short sales and forgiven debt.
That relief could make up just a glimmer of the final payout. Banks have three years to meet the settlement's requirements, which mandate that at least $10 billion must go toward principal reduction for homeowners who are underwater, delinquent or at risk of default.
Nearly $500 million more in further relief for Florida homeowners, the report states, is already in the works.
The offers are preapproved, but banks' requirements differ. Generally, homeowners must owe more on their mortgage than their property is worth, be at least a few months behind on their mortgage payments, and face a financial hardship or impending default.
After that point, bank representatives said, signing up could barely be simpler. Some refinancings are automatic, with lower interest rates appearing suddenly on homeowners' monthly statements. Some banks' loan modifications need only a signature to kick into action. At least one offer also comes with free postage.
Free money, right? Who could resist? Surprisingly, many qualified borrowers have failed to respond. Though Chase's offers for loan modification are guaranteed approval, only half of the offers mailed to borrowers have been claimed.
Unresponsive homeowners may be the victims of "borrower fatigue," jaded by the onslaught of mortgage mail and fraudulent loan-modification schemes. Perhaps, given the circumstances, they're suspicious the offer is too good to be true.
Borrowers who do sign up have been amazed at the results. Homeowners in South Tampa received a letter this month from Bank of America offering to slash their $165,000 principal to $98,000, forgive all past debt and reduce their monthly payments from $1,000 to $650.
Real estate agent Tony Delgado said the homeowners' new principal had been cut so low it was now less than the home's actual value. "If they were to turn around and sell that house right now, they could probably sell it for around $115,000," Delgado said. "So yeah, they're pretty happy."
The mortgage relief could invigorate markets for cars, trips and big-ticket spending once delayed by looming debt. Those once-trapped homeowners, suddenly lightened, might even return to the market to buy.
That's a good start, Weidner said, but banks are still getting off easy for billions of dollars of foreclosure abuse. "The reductions going back to homeowners right now are just a fraction of the fraudulent insurance claims (banks) submitted," Weidner said. "It would be like if you robbed a bank and walked away with $10,000, and you gave $10 back."
Apart from the investors who stand to lose value due to debt forgiveness, the settlement could sour a larger group: the dutiful homeowners who, in keeping up with their payments, missed out on the relief.
Louis Harris, a remodeler who fought the foreclosure of his St. Petersburg home, struggled for two years to lower his monthly mortgage payments. "It almost cost me my marriage, all the issues and the problems trying to get (the loan) modified," he said. Finally, he won: His payments were cut by $80 a month. But his neighbor, who had stopped paying the mortgage, managed to profit even more, as his mortgage interest rate and monthly payment plummeted.
"You get a bad taste in your mouth, to the point where you don't want to pay your bills," Harris said. "They're giving breaks to people who aren't even paying. It's like getting smacked in the face again."