Though proponents to the settlement characterize it as little more than a slap on the wrist, big banks could soon be required to shell out some cash to homeowners affected by deceptive lending and foreclosure practices. From checks to mortgage adjustments, nearly 2 million Americans could soon see some restitution.

Bank of America, Chase, Wells Fargo, Citi and Ally are the five big banks involved in the settlement offer. This is a settlement that stems from banks involved in the robo-signing debacle, during which time people were foreclosed on without proper documentation.

Specifics of the settlement include:

• Sending a check of $1,800 to 750,000 affected homeowners
• Adjusting mortgages down by an average of $20,000 for as many as 1 million homeowners who are “underwater” on their mortgages (i.e., owing more than they are worth)

Though this latest news makes mention only of these five major banks, I blogged last month of a $19 million settlement deal in the works for 17 banks. It’s unclear how this settlement offer ties into that one. As I blogged in December:

Last year’s launch of the investigation into the “robo-signing” debacle is coming to a head. If all goes according to plan, a number of the nation’s attorneys general will reach a $19 billion settlement with the banks involved in this illegal, economically-damaging practice in the years preceding the financial crisis (aka, the Great Recession).

Unfortunately, $19 billion comes nowhere close to compensating all of the nation’s homeowners who were wrongly foreclosed on.

It’s that last point that gets to the heart of the objections to this latest settlement news. Namely, that the penalty being imposed on the offending banks pales in comparison to the depth of damage their illegal foreclosures imposed not only individual homeowners, but on all Americans via the subsequently devastated U.S. economy.

Related posts:

1. $19 Billion Settlement In Works for Illegal ‘Robo-Signing’ Foreclosures Last year's launch of the investigation into the "robo-signing" debacle...
2. New Jersey Supreme Court Lifts Freeze on Foreclosures After a 7-month reprieve for New Jersey homeowners facing foreclosure,...
3. Banks Offer 5 Billion Dollars to Stop Foreclosure Investigations Banks are crying uncle under the weight of federal and...
4. Largest U.S. Metro Areas See Decline in Foreclosure Activity? According to a report issued yesterday by RealtyTrac Inc., in...
5. How Easy is Your Free Checking These Days? Who do you bank with, what do they currently require...