The Missouri House Budget Committee chairman said today that he supports Gov. Jay Nixon's proposal to use $40 million of a multi-state bank settlement to ease higher education budget cuts.

The chairman, Rep. Ryan Silvey, said legislators already had planned to find a way to soften Nixon's proposed  $106 million cut for the state's four-year and two-year public colleges and universities.

"I'm glad the governor is finally starting to listen to legislators and the people of this state who make education a priority," said Silvey, R-Kansas City.

The newfound money will come from a national mortgage settlement with companies that used improper ways to speed foreclosures, such as by putting fake signatures on required documents. The $25 billion nationwide settlement between the states and the banks (Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial, formerly known as GMAC) was announced this morning.

In addition to $155 million to help people who are struggling to pay their mortgages, Missouri is getting $40 million to spend as it pleases. Illinois is receiving $1 billion to help homeowners.

Missouri Attorney General Chris Koster plans a news conference at 3:15 p.m. today in St. Louis to release details of the settlement.

Nixon had already announced Tuesday that he wanted to use $40 million of the settlement to soften his cuts to higher education.

If the Legislature accepts Nixon's plan, colleges and universities would see a 7.8 percent cut in their state funding instead of 12.5 percent, as Nixon originally proposed.

For example, the windfall would restore $18.78 million to the University of Missouri and $452,481 to Harris-Stowe State University in St. Louis.

While that could relieve some of the pressure for tuition hikes, Silvey said some students still may be asked to shoulder more of the cost.

"Remember, this governor has cut higher education every year. None of us want to see tuition hikes, but he's hurt them pretty bad," Silvey said.

In Illinois, the Attorney General's office has a helpline and website available for homeowners affected by this morning's announced settlement between the states and five major banks.

The "Homeowner's Helpline" is (866) 544-7151. Information can also be obtained at www.illinoisattorneygeneral.gov/consumers/bankforeclosuresettlement.html.

In addition, borrowers in Illinois, Missouri or any other state involved in the settlement can visit www.NationalForeclosureSettlement.com.

Some of the settlement money will be spent directly by the banks on mandated remedies such as refinancing for distress homeowners and reducing principle to keep them in their homes. In addition, some who have already lost their homes due to alleged unfair mortgage practices could be eligible for monetary compensation from the settlement.

In Illinois, the settlement will be administered primarily through the Attorney General's office and the Illinois Department of Financial & Professional Regulation.

"If you have your mortgage owned by one of those five banks, they will be responsible for doing the loan modification, reimbursing families who have lost their homes, and working with families on refinancing," said IDFPR spokesperson Sue Hofer.

The refinancing portion, she said, "is especially important for families who are underwater (on their mortgages), because the banks won't touch you."

The settlement includes $1 million for the state Department of Financial & Professional Regulation to continue its ongoing investigative and enforcement work regarding home mortgages.

"Over the past years, we've seen how the flawed mortgage financial system has hurt Illinois families," Gov. Pat Quinn said in a prepared statement. "This settlement will help those most affected by the housing crisis, and will establish new rules for mortgage lending that will be easier to understand and enforce."

There has been no suggestion from Illinois officials today about using the money for state functions that are unrelated to mortgages, as there is in Missouri.

"While there are no legal restrictions on how the state funds are used, IDFPR intends to use its payment to continue to fight mortgage fraud," Hofer said in a statement.

According to Attorney General Lisa Madigan's website, "Homeowners whose loans were serviced by these banks may also qualify for direct relief in three categories: 1) Borrowers who have lost their homes, 2) Homeowners still in their homes but are at imminent risk of defaulting on their mortgages or are behind on their mortgage payments and 3) Borrowers who are current on payments but underwater."

Madigan's office outlined other action that will be taken under the settlement:

• Distressed home borrowers will be considered for a loan modification rather than being automatically referred to foreclosure.

• No loan will be referred to foreclosure while a loan modification is being considered.

• Borrowers will be allowed to appeal a denial of a loan modification.

• Mortgage servicers must provide a single point of contact for borrowers as well as easier methods for checking on the progress of their loan modification applications.

• Loan servicers will be held to strict timelines in dealing with distressed borrowers