In response to allegations of robo-signing and other deceptive practices relating to foreclosure litigation, a settlement agreement has been proposed between the nation's five biggest lenders and the states' attorneys general.

Under the agreement, Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial would cough up as much as $25 billion and agree to change the ways foreclosures are handled in the future.

According to reports, it is expected that the agreement could be adopted within weeks. Unfortunately, the millions of homeowners who have lost their homes to foreclosure might not have very much to gain from the deal, the Associated Press reported.

First, it appears that the settlement agreement would not apply to mortgages that are held by Fannie Mae or Freddie Mac, which includes about half of the county's home loans.

Additionally, many of the 11 million homeowners who are underwater in their mortgages likely won't have their mortgage balances reduced or have the opportunity to refinance under the agreement, the Associated Press reported.

The Associated Press surmised that only about one in 10 struggling homeowners would see a reduction in their principal mortgage balance, which would be reduced by an average of $20,000.

Homeowners who were victims of deceptive practices could also be sent checks for $1,800, but only about half of homeowners who are eligible for the checks may actually receive them, the Associated Press guessed.

On a more positive note, it is believed that the overhaul of the foreclosure industry's guidelines could make things easier for homeowners who are underwater or at-risk.

Source: CBS News, "$25B foreclosure deal: What it could mean for homeowners," Ilyce Glink, Jan. 24, 2012