( CNN ) -- The mortgage settlement agreed to by 49 state attorneys general seems to be yet another stroke of good luck for the banks . Ostensibly , the settlement commits the banks to pay $ 26 billion to the government and homeowners to compensate for improper conduct in the foreclosure process . In the years leading up to the financial crisis of 2007-8 , banks and mortgage companies rushed to provide mortgage loans to homeowners , many of whom were n't capable of shouldering the debt . The mortgages were bundled together and sold as exotic securities to investors . When housing prices stopped rising and homeowners could no longer refinance their way out of bad mortgages , the cycle ended and the financial crisis set in . This also led to an unprecedented wave of foreclosures that continues to this day . If anyone expects this settlement to have a noticeable effect on the housing market , they will be badly disappointed . Clearly , it will help some number of homeowners keep their homes , but the benefit is likely to limited . There are more than 10 million homeowners underwater by an average of more than $ 60,000 . If the banks actually give $ 20 billion in debt relief as a result of this settlement , that would be sufficient to give $ 20,000 to 1 million homeowners . That 's helpful , but little more than a drop in the bucket . The settlement covers a wide range of sins committed by banks and other mortgage lenders . In some cases , it was simply an issue of sloppy paperwork . That may not seem like that big of a deal , but anyone who has taken out a mortgage and had to pay a lawyer several hundred dollars to ensure that the paperwork was in order might not appreciate rules saying that big banks are not bound by the same law . If there 's no evidence of deliberate fraud , banks will be given immunity from responsibility for sloppy paperwork . A second set of sins involved more substantive violations where servicers attached fees improperly or foreclosed without proper notice . The banks treated foreclosure as a mass production operation . In many cases , this might have meant imposing penalties that they did not have a right to impose or push through foreclosures without going through all the necessary steps . The third and most serious issue involved foreclosures where banks could not prove that they owned the property . This may seem farfetched , but there are foreclosure cases in which the bank 's servicer lacked the documentation to show that it in fact owned the property . In some of the famous cases of robo-signing , people were being paid to forge documents to substitute for ones that could not be found . We do n't know whether the number of cases where mortgage servicers could not produce the documentation to establish ownership of the house were few or many . This is an issue that is likely not to be investigated as a result of the settlement . Presumably servicers will at least have to produce proper documentation going forward . While $ 26 billion sounds like a substantial sum , we do n't know at this point how much of this will the banks actually pay . Most of the payment will take the form of modifications and debt write-offs in short sales . There is no easy way to determine how much the banks will pay through this route because we do n't know what debt write-offs they would have done in the absence of the settlement . If the banks are allowed to count every dollar written off as a dollar against the settlement -- as though they would have made no write-offs otherwise -- then it is possible that they wo n't pay a dime for this settlement . We also do n't know how much the banks will pay because most of the write-offs are likely to be on mortgage-backed securities that they are servicing , not on mortgages that they own . This means that they will be paying their penalty with investors ' money . If this is not a legal first , it is certainly unusual to have a settlement where the defendant is able to pay using someone else 's money . It would have been useful if the attorneys general had pushed for a settlement that gave enforceable rights to homeowners facing foreclosure . For example , if they had required servicers to give every foreclosed homeowner the right to stay in their home paying the market rent for five years following a foreclosure , millions of homeowners would have immediately been given housing security they currently lack . And , they could enforce this one themselves rather than relying on the goodwill of the bank or government overseers . But , that does n't seem about to happen given the political power of the banks . It looks like their good luck is continuing . Follow CNN Opinion on Twitter . Join the conversation on Facebook . The opinions expressed in this commentary are solely those of Dean Baker .
Banks struck a deal with 49 states to pay $ 26 billion for improper foreclosures . Dean Baker : This will help some people , but it ' n't really help the housing market . Baker : Settlement will cover a range of sins committed by banks , other mortgage companies . He says banks are let off the hook ; they may not even have to pay the full $ 26 billion .