The deadline to claim money allocated for homeowners who were victims of the foreclosure crisis is fast approaching, with few people taking advantage of it.
Kentucky Attorney General Jack Conway says that he and his staff are actively looking to get the word out to citizens of the commonwealth who have had their homes foreclosed upon. These people may qualify for part of a settlement from the top five mortgage banks in the United States.
In 2010, it was discovered that several of the nation’s largest banks were foreclosing upon individuals based upon errors and lost documents on the bank’s end of the loan. The attorneys general of 39 states came together and worked on a settlement based on the damage these foreclosures have had on individuals and housing markets across the country.
Chase, Ally, Bank of America, Wells Fargo, and Citi were all ordered to pay millions of dollars per state to help recoup the losses accrued by these widespread clerical errors. Kentucky received $19 million that was given to and dispersed by the state.
“That came directly to the state, and we have allocated and we gave it to legal aide, the Kentucky Housing Corporation, and cities that are dealing with urban blight from abandoned properties,” said Attorney General Conway during a telephone interview on Thursday.
An additional $40 million is coming to homeowners across the state who applied for the foreclosure relief, however, they only have till January 18 to get their application in. “We had about 67,000 people foreclosed on from the period of 2008 to 2011,” said Conway.
Of these people, an estimated 15,000 could have had mortgages with one of the banks included in the settlement, and therefore could qualify for assistance. Conway said that at least $40 million has to be paid out by the banks in assistance to homeowners. This money will be given as cash payments to those affected.
“They can get $2000 in cash assistance without giving up their private litigation rights,” Conway noted.
Conway and his staff estimated that at least 5,000 people would take advantage of this program, but this number could be much higher. So far, less than 1,000 people have applied, according to the latest information.
The issues with the mortgages were found in 2010, and the attorneys general of 49 states worked quickly to remedy the situation and hopefully turn around the housing market. Oklahoma chose to file alone, but was also able to get millions from the banks.
To find out more information about this assistance and how to apply go to ag.ky.gov.