The following editorial first appeared in the St. Louis Post-Dispatch:

One of the enduring wrongs of the Great Recession has been that individual homeowners have borne and continue to bear the brunt of the housing collapse.

Nearly 4 million American families have lost their homes to foreclosure since early 2007. An additional 28 percent of the nation’s 45 million outstanding residential mortgages are under water, meaning homeowners owe more than the houses are worth.

And despite the improving economy, RealtyTrac, a California firm that collects foreclosure data from around the country, estimates that an additional 2 million homes will be lost to foreclosure this year. That’s because a lot of foreclosures that have been on hold now will move forward. A $25 billion settlement among state attorneys general, the Department of Housing and Urban Development and major banks and mortgage-servicing firms is in its final stages.

At issue: the 2010 disclosures that many banks had been faking the paperwork on foreclosures, a practice that came to be called “robo-signing.”

Thanks in part to federal bailouts, banks got healthy in a hurry after the collapse of the market for mortgage-backed securities in 2008. They couldn’t wait to shed themselves of the lousy mortgages that they’d cut into pieces and packaged as securities. But the mortgages were in so many pieces that faking the paperwork was easier than tracking it down.

But, beginning in 2010, courts in states that require judges to sign off on foreclosures began demanding to see the paperwork. As the “robo-signing” scandal widened, state attorneys general began filing lawsuits demanding fines and restitution.

Forty states now have signed on to a deal that calls for banks to pay as much as $25 billion, with the hardest-hit homeowners to be first in line. Some $17 billion in principal reductions would be spread among about 1 million of the hardest-hit homeowners. An additional 750,000 families who lost their homes would get restitution of about $2,000 each.

But on Monday, Missouri Attorney General Chris Koster upped the ante by filing criminal, not civil, charges against one defunct robo-signing mill and its president. An Alpharetta, Ga., company called DocX allegedly hired dozens of people to forge company officers’ names on foreclosure documents. Mr. Koster has charged DocX and its founder, Lorraine O. Brown, with 136 counts of forgery.

To be sure, many of these homeowners signed up to buy houses they knew they couldn’t afford. Others were suckered into it by fast-talking mortgage brokers. But all of them deserved — and didn’t get — the due process of law in the foreclosure process.

The settlement, if and when it finally occurs, will provide a measure of justice. It will help settle uncertainty in the housing market. But it will not solve all the problems.

Indeed, on Friday New York Attorney General Eric Schneiderman opened a new line of inquiry, aimed at the controversial Mortgage Electronic Registry System. MERS was created by the big banks in league with Fannie Mae and Freddie Mac, which, as government-backed companies, guaranteed millions of America’s mortgages before going bust in early 2008.

MERS now claims to hold title to more than half of the nation’s mortgages, but Schneiderman alleges that MERS is, in fact, merely a paper entity created for the convenience of banks that wanted to avoid doing the paperwork on loans.

None of these lawsuits address the problem of homeowners who have private mortgages that aren’t backed by Fannie or Freddie. Even though they may be current on their mortgages, they nonetheless are under water. Those homeowners were collateral damage in the collapse of the federally backed housing market, ineligible for mortgage relief of any sort.

In his State of the Union speech last month, President Barack Obama proposed spending up to $10 billion to help them refinance their loans. They could spend the savings elsewhere, helping to stimulate the economy, or use the money to rebuild their equity.

It’s a worthy idea that, sadly, is not going anywhere. For one thing, it would be paid for by taxing banks making risky financial transactions. Banks hate the idea, as do Republicans. GOP presidential frontrunner Mitt Romney is on record as supporting letting the mortgage crisis “run its course and hit bottom.”

Obama’s first foray into mortgage relief, back in 2009, wasn’t very effective, and this second foray appears to be largely political. Still, he’s right on the issue. Massive fraud has been perpetrated on millions of Americans. A $25 billion settlement is nice, but Mr. Koster is right: People should be going to prison.