Some of the largest and most powerful banks in the United States, including Citibank, JPMorgan Chase, Bank of America, Wells Fargo, and Ally Financial, may be on the verge of reaching a settlement over what have been deemed misleading foreclosure practices. Negotiations on behalf of the government are being conducted by a number of state attorneys general, including Florida Attorney General Pam Bondi.

Some homeowners across the country have lost their homes because they were taken advantage of during the foreclosure process. Abuses included companies neglecting to check the accuracy of information and the illegal practice of "robo-signing," which involves the forging of signatures on foreclosure documents.

For all the deception that went on, however, homeowners stand to gain comparatively little from the proposed settlement. Sources indicate that the settlement could reach $25 billion, which is a relatively small pie to split among the many homeowners affected. In addition, the settlement would affect only those mortgages given by private companies from 2008 to 2011.

For those who have experienced it, home foreclosure is one step along a tumultuous and stressful road that often involves the loss of a job or the incurring of a disability. It is essential that homeowners who are facing the prospect of foreclosure or those who are in foreclosure understand their rights. Being aware of the misleading practices mentioned above is only one aspect of the process.

Bills will come due, and aggressive creditors may begin pursuing their claims. Homeowners should know their legal and financial options, including a home loan modification or even bankruptcy. All courses of action, including bankruptcy, offer pros and cons. Homeowners should examine each option carefully with an experienced attorney and choose the one that will help them weather the financial storm.

Source: The Palm Beach Post, "Major banks offer $25 billion over foreclosure abuse," Derek Kravitz, Jan. 23. 2012.