Earlier this month, state and federal authorities were able to reach a $26 billion settlement with the biggest banks in the nation for unlawful foreclosure practices that were rampant over the past few years. Military service members whose homes were lost in an unjust foreclosure will be provided relief of their own under the deal.

The lenders have ceased resisting demands that they provide some compensation to service members who were victimized by questionable foreclosure practices.

The banks are accused of causing service members to lose their homes by violating a federal law designed to protect members of the military on active duty and deployed in combat from abuses related to mortgages and credit cards.

Federal officials and at least one state attorney general aided the service members in reaching an agreement with the giant lenders, which includes Ally Financial (previously known as GMAC), Citigroup, JP Morgan Chase and Wells Fargo.

Under the terms of the settlement, Ally, Citigroup, and Wells Fargo must compensate military service members who they victimized by paying them at least $116,785, as well as paying them interest and restoring to them any equity in the homes they lost.

In some individual instances, the compensation paid out could be adjusted to a higher number by bank regulators. JP Morgan Chase, on the other hand, reached slightly different settlement terms, providing for the military victims of its questionable practices to either receive the full sales price of their home or the home itself, free and clear of debt.

The concept of the Servicemembers Civil Relief Act is to give relief to active duty military service people so they need not worry about debt and mortgage obligation while focusing on their military service obligations.

Source: New York Times, "Mortgage Relief for Service Members," John H. Cushman, Jr., Feb. 12, 2012