If you are an American homeowner whose mortgage is (or was) with Ally Financial, Citigroup, Bank of America, Wells Fargo, or JP Morgan Chase, you’ll be interested in this news. You may be eligible for part of a financial settlement to help avoid foreclosure. The settlement will provide as much as $25 billion in relief to distressed borrowers and direct payments to states and the federal government. It is a result of an investigation into these banks’ practices of not always following the right procedure for processing mortgage loan paperwork.

The settlement provides assistance for eligible homeowners who need loan modifications now, including first and second lien principal reduction. Another potentially eligible group is borrowers who are current, but underwater. These borrowers may get the opportunity to refinance at today’s historically low interest rates. The third group who may seek relief are borrowers who lost their homes to foreclosure. $1.5 billion will be distributed nationwide to about 750,000 borrowers.

If you have your home loan through Fannie Mae or Freddie Mac, then this particular settlement won’t affect you. Here’s the government website that will explain more about whether you may qualify and how to make your claim: http://www.nationalmortgagesettlement.com/