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Grants to help avoid foreclosures

A $400,000 grant announced Monday might give people in danger of foreclosure the opportunity to stay in their homes.

The Federal Home Loan Bank of Cincinnati said residents who meet certain income requirements can receive up to $3,500. Those who qualify must apply through Lexington's Community Ventures Corp. and take a credit counseling class.

The program, Preserving the American Dream, will be available to homeowners in 52 Kentucky counties, including Fayette and Jefferson.

The one-time grants, which do not have to be repaid, will be available "virtually immediately," said Gary Throckmorton, a Community Ventures specialist in business development and housing.

Community Ventures Corp. provides foreclosure prevention counseling, mortgage refinancing and rescue loans.

"Since January, we have worked with 500 Kentucky families to help them stay in their homes," said Kevin Smith, the CVC president.

And its mission is supported by the Federal Home Loan Bank of Cincinnati, which has more than $95 billion in assets and lends money to 700-plus financial institutions in Ohio, Kentucky and Tennessee for homeowner mortgages.

"You heard about Freddie Mac and Fannie Mae, but you seldom hear about the federal home loan banks. But we play a very important role, somewhat behind the scenes," said David Hehman, president of the Cincinnati bank.

"This is not California. This is not Florida, where you had phenomenal increases in home prices, and now you have rapidly falling home prices, which is really the crux of the issue in the financial markets, " he said. "But there are mortgage foreclosure problems in Ohio, Kentucky and Tennessee."

"The last thing a commercial bank, a thrift or a credit wants to do is foreclose on a mortgage," Hehman said. "Everybody loses — the bank, the borrower, the community. It's the worst of all possible outcomes, one we try to avoid at all possible costs."

The program announced on Monday is a voluntary program where the bank will set aside $2 million in private money for grants, he said.

Republic Bank & Trust of Louisville, Central Bank of Lexington, Farmers Bank & Trust in Georgetown, Kentucky Bank of Paris, Liberty Alliance Federal Credit Union in Lexington will help identify homeowners who need assistance.