A landmark multistate settlement with several of the nation’s top banks will enact a monetary penalty for years of foreclosure abuses and bring some much needed relief to homeowners hit hardest by the mortgage crisis.

In the multistate settlement the banks agreed to $20 billion in mortgage relief and $5 billion to be paid to local and state governments.

The California Attorney General’s Office secured a separate agreement that will bring in $18 billion for struggling homeowners and put into place enforceable guarantees that will hold the banks accountable for their commitments to the state.

"California families will finally see substantial relief after experiencing so much pain from the mortgage crisis," said Attorney General Kamala Harris. "Hundreds of thousands of homeowners will directly benefit from this California commitment."

The settlement comes after all 50 state attorney generals initiated an investigation into the banks’ foreclosure practices, including robo-signing and using misleading documents to improperly seize homes.

California departed from the multistate negotiations last September when the estimated relief to California was $4 billion.

"This outcome is the result of an insistence that California receive a fair deal commensurate with the harm done here,” Harris said. “We insisted on homeowner relief for Californians and demanded enforceability so homeowners actually see a benefit that will allow them to stay in their homes, and preserved our ability to investigate banker crime and predatory lending."

The financial benefits of the agreement extend to homeowners whose loans are owned or serviced by Bank of America / Countrywide; JPMorgan Chase / Washington Mutual, Ally Financial, Citibank, and Wells Fargo / Wachovia.

For California the largest portion of the settlement — $12 billion — will be used for reducing the principal or offer short sales for the estimated 250,000 homeowners who owe more on their loans than their homes are worth and are behind on their payments.

An estimated $849 million will be used to refinance the loans of 28,000 homeowners who are underwater on their loans, but current with their payments.

The settlement will be doling out $279 million as restitution to the estimated 140,000 California homeowners who were foreclosed upon between 2008 and Dec. 31, 2011.

Additionally, $3.5 billion will help relieve the 32,000 homeowners who still owe balances on their foreclosed homes.

California's separate guarantee also creates important incentives to ensure that banks will reduce the principal mortgage balance of underwater homeowners in California's hardest-hit counties and that the principal reductions in these communities will occur within the first year of the settlement.

Failure to achieve this minimum level of reductions will result in substantial cash payments of up to $800 million that the banks will have to pay to the state. Unlike the larger multistate agreement, which is enforceable in a federal court in Washington, D.C., this payment provision empowers the Attorney General to summon the banks to California state court.

The agreement does not extend to individuals whose home loans are through Fannie Mae and Freddie Mac.

"I will continue to fight for principal reductions for the approximately 60 percent of California homeowners whose loans are owned by Fannie Mae and Freddie Mac," Harris said.

County-specific payments are based on the number of homeowners and the depth of the foreclosure crisis. It is estimated that Stanislaus County homeowners will accrue $368 million in benefits over the three-year life of the commitment.

“I applaud Attorney General Harris for her diligent work on behalf of wronged California homeowners,” said Congressman Dennis Cardoza, who has been critical of the lack of aid extended to Stanislaus County. “This is huge step for the state and will help hundreds of thousands of homeowners who have been devastated by the housing crisis. $18 billion in funding will go a long way toward stabilizing the housing market, and I am extremely pleased that Stanislaus County and the Central Valley were directly compensated as part of the settlement.”

To find out if you may be eligible for a loan modification, refinance, short sale or other foreclosure prevention relief under the settlement, you will need to contact your mortgage servicer. To find the servicer on your loan, look for a contact phone number on your mortgage statement. Contact the bank or servicer listed on the statement to ask who services or owns your mortgage loan.