“Finally, of course, we need strong federal mortgage-servicing standards to protect all homeowners from the unfair and incompetent servicing and foreclosure practices that have driven many out of their minds due to lost, wrong or even illegally prepared paperwork and forced far too many more out of their homes,” Mierzwinski said.

Monday’s settlement came on the heels of a massive $25 billion settlement last February between 49 state attorneys and five major banks: Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial. The banks acknowledged abuses in the foreclosure process such as robo-signing, in which documents were processed without proper documentation and often with forged signatures.

Details of how Monday’s settlement will work remain murky, said Kathleen Day, a spokeswoman for the Center for Responsible Lending, a nonprofit advocacy group based in Durham, N.C.

Strong enforcement provisions are needed to ensure that the money and relief are allocated in the best and fairest way possible, Day said.

“We’re hoping there will be incentives in there for banks to give mortgage forgiveness in a way that keeps people in their homes and avoids foreclosure,” she said.

Mortgage relief doesn’t do much good if it forces homeowners into short sales, for example, Day said, meaning that the banks forgive borrowers’ debts if they sell their properties for less than they owe. “A short sale is effectively a foreclosure,” Day said. “It’s a fire sale.”

Leaders in the House Committee on Oversight and Government Reform had sent a letter to regulators Friday to request a briefing before any new settlement was reached or announced publicly.

U.S. Rep. Elijah E. Cummings of Maryland, the committee’s top Democrat, said he was deeply disappointed that government watchdogs had finalized the agreement before answering questions from Congress about how the settlement amount was determined, how money would be distributed and what would happen to other families abused by mortgage-servicing companies who hadn’t yet had their cases reviewed.

“I do not know what the rush was to make this settlement without answering these key questions, and although I look forward to obtaining information about how this deal may assist homeowners, I have serious concerns that this settlement may allow banks to skirt what they owe and sweep past abuses under the rug without determining the full harm borrowers have suffered,” Cummings said..

A payment agent will contact eligible homeowners by the end of March to administer payments, regulators said. Those affected by the settlement don’t need to take any action, they said.

The settlement affirms much of what McClatchy and other news organizations have chronicled in recent years as homeowners struggled for help to avoid losing their homes. A series of McClatchy stories in 2010 and 2011 documented how servicers, many owned by major banks, routinely lost borrowers’ paperwork and often foreclosed on the very people whose loans they supposedly were modifying.

“Part of it had to do with not enough manpower to handle the inquiries for help, and their solution was . . . inaccurate information to the borrowers,” said George Bosch, the legal administrator for the Los Angeles-area law office of Edward Lopez and Rick Gaxiola.