WASHINGTON—The vast majority of borrowers being compensated for mortgage-related abuses will get $1,000 or less apiece, a sobering coda to a protracted attempt to help those who may have been placed into foreclosure as a result of banks' mistakes.

About 4 million borrowers will share $3.6 billion in cash as part of a settlement between federal regulators and banks accused of foreclosure-processing mistakes. U.S. regulators said Tuesday that banks wrongfully took away homes from 1,082 borrowers who were members of the U.S. military....