In the wake of the announced settlement between the nation's largest lenders and homeowners who were wrongfully foreclosed on due to the robosigning scandal, some critics anticipate the settlement will do very little to relieve the mortgage industry, The New York Times reports.
The lenders recently came to an agreement with a number of state attorneys general offices for $25 billion in relief - 90 percent of which will go to distressed borrowers, while the remaining 10 percent will go to the states involved in the legal action.
However, despite the sizable settlement, a number of industry experts believe the money is not enough to repair the damage that has already been done.
"The total number of dollars is still small compared to the value of the mortgages that are underwater," Director of the University of Southern California's Lusk Center for Real Estate, Richard Green, told the news source.
According to the Times, the deal will only reduce the amount of debt for a fraction of the borrowers affected by the wrongful foreclosure actions, and many analysts are still pondering how the settlement will actually change the status of struggling borrowers or help households keep their properties.
Forty-nine states in total were involved in the legal proceedings, and California and Florida - two of the states hit hardest when the housing bubble burst - will receive a majority of the settlement.
Real estate data from RealtyTrac, at the beginning of 2012, nationwide approximately one in every 624 homes were in some stage of the foreclosures process. Specifically, it was reported that Florida had one in every 363 homes in foreclosures, while California had one in every 265 properties.
Meanwhile, critics told the news source that without changes made to lending regulation, the multibillion-dollar settlement will do little to cut down on the both the foreclosure rate and help troubled homeowners.
Currently, due to the present standards in place, the Times notes that a large number of borrowers who would have been qualified at the housing market's peak are currently being passed from lender to lender, unable to find relief through a loan modification.
However, in order to curb this trend, lawmakers plan to create a single point-of-contact program for borrowers who will be receiving a portion of settlement - a plan that many hope will give these households relief after years of displacement and hardship.