Kentucky to Get $58.8 Million of Foreclosure Settlement

By Brenna Angel

FRANKFORT, Ky. – Kentucky's share of the $25 billion nationwide foreclosure settlement with five major banks is nearly $59 million. Attorney General Jack Conway announced Thursday how that money will be used to help borrowers struggling with high mortgage payments or who have already been through foreclosure.

Some of the funds will go toward paying down principal balances for consumers who owe more than their home is worth.

"The goal here is to make certain that we try to get a write-down of people who are underwater. The average write-down we think is going to be somewhere in the neighborhood of 20% of the loan value," Conway says.

Kentuckians who were foreclosed upon in the past four years using robo-signed documents could be eligible for direct payments of up to $2,000. The five banks in the settlement -- Bank of America, Chase, Wells Fargo, Citi, and Ally Financial -- are expected to contact eligible consumers about their assistance options. Borrowers can also find more information at www.NationalMortgageSettlement.com.

Kentucky was one of the last states to agree to the settlement. The Conway says his office is still investigating issues with mortgage-backed securities and whether mortgage assignments were properly recorded.

"We're going to thoroughly investigate the issue of MERS, which is the Mortgage Electronic Registration System and its effects on the Commonwealth of Kentucky."

Conway also announced that he subpoenaed MERS Thursday for allegedly failing to properly record mortgage assignments and pay filing fees with county clerks.