Of the $25 billion settlement, $17 billion is dedicated to modifying mortgages for those behind on their payments; around 1 million homeowners could see reductions of as much as $100,000 off their principals. Another $3.7 billion will go toward refinancing mortgages for borrowers who make their payments on time but who owe more on their mortgages than their homes are worth. In addition, the five banks must pay $5 million in fines to the government, $1.5 million of which will go to the Borrower Payment Fund, which will provide cash payments of $1,500 to $2,000 to homeowners who saw their homes foreclosed between January 1, 2008 and December 31, 2011. To comply with the settlement, banks must also implement new standards to protect homeowners from future foreclosure abuses.

The settlement, however, doesn't benefit everyone. Fannie Mae and Freddie Mac mortgages, which account for half of the mortgages in the country, are not included in the settlement. Loans insured by the Federal Housing Administration are also excluded. To find out if the settlement affects you, visit www.nationalmortgagesettlement.com.