LOUISVILLE, Ky (WHAS11) -- Louisville Metro Government will spend $1.5 million of Kentucky's $19.2 million share of the National Mortgage Settlement to foreclose, demolish and rehab vacant and abandoned properties.
Mayor Greg Fischer and Kentucky Attorney General Jack Conway announced the allocation of the funds at a Monday morning news conference in front of a boarded up house in the city's Russell Neighborhood.
Next door on West Jefferson Street, Yolanda Oliver welcomed the action.
"We've had rats, the rats have been coming constantly," Oliver said.
Whatever the city decides to do with its 6,000 to 7,000 vacant properties, Oliver says just do it.
"I think they either need to be refurbished or tore down," she said.
That's exactly the mayor's plan for some 1200 abandoned properties -- a plan that got a sudden boost today when Conway delivered $1.5 million from the National Mortgage Settlement.
- $750,000 to foreclose on 700 abandoned properties.
- $500,000 to demolish 75 others.
- $250,000 for a revolving loan fund to help rehab vacant properties.
"So, those are the worst properties we'll attack them first," Fischer said. "So that will make a significant difference."
In addition, housing agencies in Louisville are also getting $1.5 million from the settlement, part of a larger allocation to the Kentucky Housing Corporation - aimed at affordable housing for low and moderate income families.
“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 in a news release. “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.”
“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 in the news release. “We plan to use this money to strategically invest in programs with real results.”
From 2008 through 2011, banks foreclosed on 66,997 properties in Kentucky – 16,403 of those properties are in Louisville, the attorney general's office said.
"This year is going to be the first year since the foreclosure crisis where people have seen a big change," Fischer said.
And Conway still not done -- holding back more than $4 million of settlement cash to investigate whether banks should be held further accountable for failing to adequately record mortgages.
"We have a pretty big potential case here and if we can take a little bit of this money and use it in the next phase of the investigaiton then we have a chance for an even bigger recovery," Conway told WHAS11.
Mortgage Settlement History - courtesy Office of Kentucky Attorney General
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 <http://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