A mortgage is a contract. You agree to pay a certain amount of money to the bank each month, and the bank, in turn, agrees to finance your purchase, play fair and not jeopardize your ability to keep a roof over your head.
Ten big banks said Monday that they'll shell out $8.5 billion to settle federal complaints that they wrongfully foreclosed on hundreds of thousands of homeowners who should have been allowed to stay in their homes.
They got off cheap.
The average compensation for each homeowner who faced foreclosure in 2009 and 2010 will run about $2,000.
That's a couple thousand bucks for having been deceived and pushed around — and possibly thrown out onto the street — by a bank that was knowingly breaking regulatory procedures in handling distressed properties.
That's a couple thousand bucks for having your life turned upside-down and dealing with a take-no-prisoners financial system that refused to acknowledge, at least at first, that it was behaving duplicitously.
Alys Cohen, a staff attorney for the National Consumer Law Center, called Monday's settlement "wholly inadequate in light of the scale of the harm."
By ponying up a few billion dollars, Chase, Bank of America, Wells Fargo, Citibank and a half-dozen smaller banks will close the books on a federal investigation into accusations that they mishandled people's paperwork and skipped required steps in the foreclosure process.
Among the banks' abuses: They routinely assigned employees to approve foreclosures without giving homeowners' documents a thorough going-over. In some cases, according to investigators, they signed foreclosure papers without even reading them.
Some bank workers admitted signing more than 10,000 foreclosure affidavits a month. That's about four per minute for any bank staffer working a 40-hour week.
Think of that: As millions of families were grappling with job losses and the worst economic downturn since the Great Depression, banks were devoting all of 15 seconds to deciding the fate of people's homes.
And this followed months of requiring homeowners to file reams of documents to make their case for why they should be given just a little leeway on their obligations.
Michael Adams, 56, of Sun Valley told me Monday about his experience with Wells Fargo. He lost his job as a dairy plant supervisor in July 2011 and immediately reached out to the bank to share his concern about making his mortgage payments.
"They told me to call them back when I actually couldn't pay," Adams said. "That happened in July 2012 when I missed my first payment. Wells said they'd try to work something out."
It took nearly half a year, but the bank at last got back to Adams with what it characterized as a helping hand during his time of need.
Wells reduced Adams' interest from 4.37% to 4.25% — an eighth of a percentage point. The current average for a 30-year mortgage is 3.34%. The average for a 15-year loan is 2.64%.
Adams knows he can consider himself lucky. He's among the relative few to receive a loan modification from a bank. But he wonders how serious Wells is about helping him get through his current hard times.
"An eighth of a point is no help at all," Adams said. "It seems like they'd be just as happy if I lost the house."
Federal officials reached a similar conclusion. They decided that banks simply weren't providing enough relief to homeowners even after earlier agreeing to spend billions atoning for their mortgage sins.
Before Monday's settlement, the banks had paid about $1.5 billion to private consultants to help them deal with the mess, officials found, while making little effort to assist mortgage holders.
The latest settlement requires the banks to spend $3.3 billion to compensate borrowers whose homes were unfairly foreclosed upon, plus $5.2 billion in mortgage assistance to others.
Citi, for its part, said the bank is "pleased to have the matter resolved." Chase said it was "pleased to have it now behind us," as if everyone can now live happily ever after.
The banks certainly will. In 2011, the year after the period covered by Monday's settlement, Citigroup pocketed $11.3 billion in profit. JPMorgan Chase saw record profit of $19 billion. Wells Fargo posted almost $16 billion in profit.
BofA was the poor relation of the family. It earned only $1.4 billion in profit in 2011 as the bank continued dealing with its acquisition of troubled Countrywide Financial.
These four banks alone accounted for almost $48 billion in annual profit on the heels of subjecting borrowers to some of the most despicable behavior imaginable.
Now they'll join other banks in collectively paying just $3.3 billion to homeowners they abused, plus an additional $5.2 billion to do what they should have done all along — help customers deal with extraordinary circumstances.
Separately, BofA agreed to pay more than $10 billion in cash and loan buybacks to mortgage financing giant Fannie Mae to settle Countrywide-related claims.
Adams, the Wells Fargo borrower, told me he's finally working again, behind the meat counter at a local supermarket. But he isn't sure how he'll make his full mortgage payments despite Wells' eighth-of-a-point rate cut.
"I had to borrow money to make this month's payment," Adams said. "I don't know what I'm going to do for February."
Maybe Wells and other banks should spend more than a few seconds thinking about that.
David Lazarus' column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send tips or feedback to email@example.com.