A state settlement with mortgage companies over foreclosure abuses and fraud could help Fairfield County land more than $600,000 to clean up blighted properties and prepare them for future development.

A state settlement with mortgage companies over foreclosure abuses and fraud could help Fairfield County land more than $600,000 to clean up blighted properties and prepare them for future development.

Last March, Ohio Attorney General Mike DeWine settled a lawsuit against the nation's five largest mortgage services for foreclosure abuses, fraud and unfair and deceptive mortgage practices.

As a result, the attorney general's office received $330 million, and it's allocated a total of $75 million of that money to be spread among each of Ohio's 88 counties through its "Moving Ohio Forward" program.

Each county will receive funds to demolish vacant, abandoned and blighted properties, which the attorney general's office said "detract from existing home values and create a toxic breeding ground for crime."

By month's end, the Fairfield County commissioners and the Lancaster-Fairfield Community Action Agency expect to hear how much of the $571,260 they have requested in Moving Ohio Forward money they will be awarded.

They also have $71,260 in matching funds to contribute to the fight against blight after receiving monetary and in-kind services donations from a variety of groups, including the city of Lancaster's Code Enforcement Department, area attorneys, Walnut Township and Lancaster-Fairfield Community Action Agency's Community Housing Department division.

If the state grant is awarded in full, Fairfield County would have $642,520 to put toward the demolition of 40 abandoned and blighted properties.

In each case, the property owners have signed off on the demolitions, which county officials hope will facilitate economy development once the problem properties are razed or cleared of debris, brush and weeds.

"We definitely think this is something that can help the county," said Kathryn Clausen, housing planner for the Lancaster-Fairfield Community Action Agency.

"The purpose is to eliminate the blighted structures in the county and be able to redevelop them so we don't have to expand into farmland in the county for development."

Violet Township has identified 10 properties to be addressed by the Moving Ohio Forward grant.

Township director of operations Bill Yaple said those represent just a portion of the approximately 866 -- 6.3 percent of the township's total housing stock -- that is vacant, abandoned or blighted properties as identified by the township.

"We haven't had time to do a full inventory," he said.

"We've been a lot more aggressive this year than we have been in identifying them, getting them mowed and things like that."

Still, Clausen said if the county receives the full grant award from the state attorney general, approximately 32 percent of those funds would be allocated to Violet Township.

"Thirty-two percent of the funds would go to Violet Township, 35 percent would go to Lancaster and the rest would go to Walnut Township and other townships in the county," Clausen said.

"If Fairfield County gets any of the funding to take care of blighted properties in the county, it would be a positive thing."

Under the Moving Ohio Forward program, a home is considered "abandoned" when mortgage or tax foreclosure proceedings have been initiated for the property, no mortgage or tax payments have been made by the property owner for at least 90 days and the property has been vacant for at least 90 days.

A parcel can be deemed "blighted" for various reasons, including being dilapidated, unsanitary, unsafe or vermin infested and because of its condition has been designated by an agency responsible for enforcement of housing, building or fire codes as unfit for human habitation.

It also could be designated as blighted if the property poses a direct threat to public health or safety, or has tax or special assessment delinquencies exceeding the fair value of the land that remain unpaid 35 days after notice to pay has been mailed.

"We can't use these funds for redevelopment, but we can use them to demolish and clear the property," Clausen said.

Clausen said 54.7 percent of Fairfield County's housing stock was built before 1979, which was before prohibitions against the use of lead-based paints.

Therefore, the county is working to identify homes and other blighted properties that don't have issues related to lead paint and asbestos, which cannot be redeveloped if those materials have made their way into the ground.

"We hope we can do as much good as possible, and help bring some good development prospects to the county," she said.

After the grants are awarded, it's expected the demolitions would occur between October of this year and November 2013.

Yaple said Violet Township is involved in the project, in part, because the township isn't required to provide matching dollars.

He also said the township is receiving cooperation from banks that have taken ownership of homes and buildings which have gone into foreclosure, and public health and safety can be improved through the program.

"It's basically free money from the state," Yaple said.

"Some of these properties, they let the grass grow and people begin to do other things on those properties," he said. "It downgrades the neighborhoods.

"They break out windows, vagrants use them, things like that," Yaple said.

"The banks are interested in not losing value, so they're on board with it."