KPTH FOX 44: Local News and Entertainment for Sioux City and Siouxland | $25 Billion to Help Homeowners With Foreclosure Abuse

Billions of dollars, $25 billion to be exact.

That's the combined amount some homeowners could be seeing over the next few years.

Those billions are coming from a settlement between 49 states and five major banks over foreclosure abuse.

The nation's five largest mortgage companies: Bank of America, Wells Fargo, J-P Morgan Chase, Citigroup and Ally Financial have all agreed to help out homeowners who are making payments and owe more than their homes are worth.

Some relief could be on the way for the millions of Americans struggling to stay in their homes in the form of a $25 billion settlement.

"Under the terms of this settlement America's biggest banks - banks that were rescued by taxpayer dollars - will be required to right these wrongs," says President Barack Obama.

Federal and state investigations found banks used abusive foreclosure practices, like robo-signing, when some workers signed paperwork they hadn't read or faked signatures to speed up evictions.

For Iowa the settlement means more than $40 million dollars in direct relief for homeowners, South Dakota's set to get more than $7 million.

"The monetary settlement will trickle down to our area a little bit, but I don't see it as a big boom for the economy," says Fred Holcomb, Vice President of Sales for United Real Estate Solutions in Sioux City. "But it's going to be helpful for some people."

As part of the agreement nearly 750,000 people nationwide who lost their homes through foreclosure from January 2008 to December 2011 will be eligible for a check payment.

"I guess the average homeowner cash wise might get $2,000, but they may get a bigger principal reduction if they're still living in their homes and in the process of foreclosure if it was improperly done," says Holcomb.

This is a pretty complex agreement, it's set to span more than three years.

If you've been affected and are wondering what to do next, some borrowers may be contacted directly by one of the five mortgage providers in this settlement.