The long-awaited foreclosure settlement for years of robo-signing, rubberstamping, and other fraudulent foreclosure practices is here, and over 40 states have signed the agreement calling for $25 billion from five major lenders (Bank of America, Wells Fargo, Citibank, Ally Financial, and JPMorgan Chase).

The deal is supposed to provide limited immunity for the banks in exchange for funds that are designated for principal write-downs, restitution payments, and mortgage loan refinancing. It also is supposed to send a loud and clear message to the banking industry that a fraudulent and error-prone foreclosure process is no longer acceptable – as well as to punish the banks with a hefty fee.

It appears, though, that the banks have adjusted for the anticipated settlement and have quietly been building their reserves for over a year to handle the financial impact.

In fact, since the five banks knew the settlement was coming down the pipeline so far in advance, any payments made as a result have already been factored into past earnings – and have also been factored into the share value by investors and analysts who also knew the settlement would one day be here.

In essence, while current homeowners and those who fell victim to home foreclosures will receive some monetary compensation or assistance, the settlement will not fulfill one of its main purported reasons for existence: teaching the banks a lesson.

That role may have to be fulfilled by the states – at least, the handful of states that did not agree to the settlement and have yet to sign. This group is small but influential, containing California and New York along with Nevada and Delaware. Attorneys general from New York and Delaware, among others, have promised some form of investigation or probe into the foreclosure scandals of the past three years, and criminal penalties could be pursued if the investigations turn up convincing, smoking gun evidence.

Nevertheless, as it stands today the bottom lines of the big banks are relatively protected from the full impact of the settlement, mainly due to the extended timeframe. They still will have to protect themselves from future legal action associated with several high-profile cases, particularly ones involving MERS and the Securities and Exchange Commission over securitization, but as for now, they are relieved that the settlement is here to stay.