Monday July 30, 2012
$3.2 million will target vacant, abandoned homes in Louisville
Mayor Greg Fischer joined Kentucky Attorney General Jack Conway to announce today that more than $3 million of the $19.2 million Kentucky received as part of the National Mortgage Settlement will be used to help rid Louisville of vacant and abandoned properties in targeted neighborhoods.
Fischer said the funding will allow the city to foreclose on 700 vacant homes, demolish 75 vacant homes and create a revolving loan fund within the Affordable Housing Trust Fund to help rehab vacant properties.
“This $3.25 million will have a real impact in our city; a real impact in neighborhoods; and most importantly, it will have a real impact on citizens who are living everyday with the problems that vacant and abandoned properties create,” Fischer said.
Fischer said there are 6,000-7,000 vacant and abandoned properties in Louisville.
“These properties encourage crime; they depress property values of people who live nearby; they cost the city money in the form of lost taxes; and they require taxpayers to waste tens of thousands every year on boarding the homes, mowing the yards – money that could be spent on other services,” Fischer said. “We plan to use this money to strategically invest in programs with real results.”
“I am proud to say that the money I secured on behalf of Kentucky will be going to help people and communities who were harmed by the mortgage foreclosure crisis,” General Conway said. “This settlement will provide second chances for people who’ve lost their homes, help revitalize properties that have been abandoned, and develop affordable housing in communities throughout our Commonwealth.”
General Conway made the announcement today in Louisville. As Kentucky’s largest city, it suffered the most severe impact from the national mortgage foreclosure crisis. From 2008 through 2011, banks foreclosed on 66,997 properties in Kentucky – 16,403 of those properties are in Louisville.
Breakdown of Settlement Allocations
- $1.5 million to the City of Louisville. $750,000 to the city’s Vacant Abandoned Property Initiative that targets properties in Louisville that have been abandoned by foreclosing on the city liens to return them to productive use and the property tax rolls. The money is eligible for a match by the Bloomberg Foundation. $500,000 to the Targeted Demolition Program that addresses the problem of blight by removing deteriorated structures that have been abandoned. $250,000 to the Affordable Housing Trust Fund, which provides grants to organizations dedicated to creating or preserving affordable housing for low and moderate-income families.
- $7.5 million to the Kentucky Housing Corporation (KHC). $3 million to the NeighborWorks Alliance, which will leverage matching grants for an additional $7.5 million. Funds will be provided to federally-supported housing programs that cover all of Kentucky’s 120 counties to assist with purchase and rehabilitation of existing properties, purchase and rehabilitation of affordable rental properties, and purchase of mortgages to restructure payment in an effort to allow homeowners to retain properties. $3 million to establish a down payment pool and closing cost assistance pool for owners who want to purchase vacant or foreclosed properties. $1.5 million to the Homeownership Protection Center, which will fund 19 Kentucky Housing Corporation approved counseling agencies that provide foreclosure prevention and pre-purchase counseling.
- $250,000 to each of the four regional Legal Aid centers in Kentucky. Money will be used to assist homeowners who are going through the foreclosure process or seeking to avoid foreclosure.
- $4 million to update the Kentucky All Schedule Prescription Electronic Reporting Program. Money will be used to enhance software to ensure compliance with House Bill 1, Kentucky’s newly enacted prescription drug abuse law.
- $5 million to the Office of the Attorney General to assist consumers and investigate mortgage and securities issues. This includes potential litigation regarding MERS involvement in wrongful foreclosures.
- $150,000 to the Cabinet for Health and Family Services. Funds will provide lead abatement through the Division of Public Health.
“We appreciate General Conway allocating a significant portion for housing programs that will help stabilize communities, stimulate home purchases and assist Kentucky families at risk of foreclosure,” said KHC Chief Executive Officer Richard L. McQuady.
In addition to providing guidance on how the funds should be spent, to ensure accountability, the organizations must report to the Office of the Attorney General every month on how the settlement dollars are actually being spent
“I am pleased our office identified agencies that can match our settlement dollars with other grants to maximize the potential assistance to our friends and neighbors,” said General Conway. “This settlement is going to help the people of Kentucky and our communities that have all been touched by this foreclosure crisis.”
Mortgage Settlement History
Forty nine state attorneys general reached the settlement with the nation’s five largest banks in March of 2012. In addition to the $19.2 million, Kentucky also received $38.7 million that will be allocated by the administrator of the settlement to consumers who qualify for refinancing, loan write downs, debt restructuring and/or payments of up to $2,000.
The five banks included in the settlement are: Bank of America, JP Morgan Chase, Wells Fargo, Citi, and Ally/GMAC. In order for consumers to receive direct assistance from this portion of the settlement, they must have a mortgage that is or was held by one of these banks.
A website has been established to provide consumers with information about the settlement at www.NationalMortgageSettlement.com . Banks will also be directly contacting consumers who qualify for payments or assistance. If consumers have questions, they may call:
- Bank of America 1-877-488-7814
- JP Morgan Chase 1-866-372-6901
- Wells Fargo 1-800-288-3212
- Citi 1-866-272-4749
- Ally/GMAC 1-800-766-4622
The Office of the Attorney General set up a web page with information and answers to frequently asked questions about the settlement www.ag.ky.gov/mortgagesettlement .