Joined by Louisville Mayor Greg Fischer and other housing advocates, Kentucky Attorney General Jack Conway announced Monday that his office is allocating $3.2 million to the city to deal with vacant and abandoned properties.
The funding comes from a $19.2 million pot the state got from the National Mortgage Settlement, which was the result of a lawsuit filed by several states against five of the country’s top banks. Across the country, states are using the money to provide legal assistance to homeowners facing foreclosure, redevelop foreclosed properties and reduce the blight created by vacant properties.
Conway says his office fought with state lawmakers during the legislative session to push that the settlement money be used for these sorts of programs and initiatives
“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,” says Conway. “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.”
The announcement was made in front of a vacant home in west Louisville, which has been hit hard by the housing crisis. From 2008 through 2011, banks foreclosed on over 16,000 properties in Louisville with some neighborhoods seeing a third of their homes left vacant.
The city will receive $1.5 million directly with a quarter million dollars going to the Affordable Housing Trust Fund that was created in 2008. Another $750,000 will go to the Vacant and Abandoned Property Initiative that aims to return vacant homes to productive use and put them on the property tax rolls, and $500,000 will go to the Targeted Demolition Program.
Fischer says the dollars will have a significant effect on the city’s distressed neighborhoods and the funding will help Metro Government strategically invest in housing programs.
“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,” he says. “We plan to use this money to strategically invest in programs with real results.”
Another $2 million will go to city legal aid funds and housing agencies through the Kentucky Housing Corporation.
In addition to the $19.2 million, Kentucky also received $38.7 million that will be allocated by the administrator of the settlement to residents who qualify for refinancing, loan write-downs and debt restructuring.
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.