Several of the largest financial institutions in the country may agree to a settlement that could provide compensation to as many as a million homeowners for improper foreclosure proceedings. The announcement of the potential deal was made earlier this month by U.S. Housing and Urban Development Secretary Shaun Donovan. 

Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co., Citigroup and Ally Financial Inc. have been in talks with federal officials and state attorneys general to distribute as much as $25 billion to the thousands of homeowners who have fallen victim to a practice known as robo-signing. Robo-signing occurs when the bank signs off on foreclosure documents without thoroughly reviewing the content for accuracy.

The settlement is not set in stone, and a number of recent events may derail the deal altogether. In addition, consumer advocates and attorneys argue that the settlement agreement is not proportional to the amount of damage the banks have caused homeowners.

“Some say, ‘Look how far we are going. At least we are doing something that would benefit those who were impacted by the banks’ actions,’” says Graig Zappia, a real estate lawyer at Tully Rinckey. “Others say the settlement is basically letting the banks off the hook.”

Please see full article below for more information.