According to the settlement, foreclosures were not properly filed. There was a 10 month investigation, beginning in October 2010.
The investigation found the fraud, and then, "The major mortgage servicing banks soon acknowledged that individuals had been signing thousands of foreclosure affidavits without reviewing the validity or accuracy of the sworn statements." That's according to a statement from Philip A. Lehman, Assistant Attorney General for the Consumer Protection Division of the North Carolina Department of Justice.
Lehman's statement also said "Several national banks then agreed to stop their foreclosure filings and sales until corrective action could be taken."
Of the $25 billion, $17 billion will be available to reduce mortgage principals for those affected.
The deadline to file for your place in the settlement is on January 18th. Your home would have had to be foreclosed on between January 1, 2008, and December 31, 2011.
The five lenders named in the settlement are Bank of America, JP Morgan Chase, Citigroup, Wells Fargo, and Ally Financial.
Lubbock Attorney Fernando Bustos said it's important to at least look at any class action lawsuits that may come your way, as some, could help you out.
There's more information on the settlement at this website, from National Mortgage Settlement.