(WEAU) - It is a bit of sunshine for those living in the darkness of foreclosure. A $25 billion dollar settlement from some fo the nation's biggest mortgage lenders to help homeowners.

Wisconsin will get about $140 million dollars. But in a news conference yesterday, Governor Walker and Attorney General J.B. Van Hollen announced a plan to use about $26 million dollars of that money to go toward fixing the hole in the state's budget defecit. A move that has at least one local lawmaker upset.

"The Chippewa Valley has seen a rash of foreclosures," said State Senator Kathleen Vinehout. "Just in the last couple months I've had more people contact me than I've had in the entire time I've been senator and this is a time when people need this help."

Attorney General Van Hollen says most of the money will still be used to help homeowners in Wisconsin's hardest hit areas like Milwaukee.

"The overwhelming majority of the foreclosures and the loans where people are upside down are in the city of Milwaukee," said J.B. Van Hollen, Wisconsin's Attorney General.

But despite that, Milwaukee mayor Tom Barrett came out against the plan, saying, "not one dime should be used to fund the unbalanced state budget."

One political expert told us it is a bold move by the governor, considering the political climate.

"It has the ability to be used against the governor with the recall process should it come to a recall election," said Kimberly a Political Science professor at the University of Wisconsin-Stout.

The Attorney General's office tells us in a statement the $26 million its using from the settlement to help the budget could be used to help avoid tax increases, fund programs for the needy and avoid public employee layoffs.

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MADISON — Wisconsin plans to use about $26 million of its $140 million share of a national mortgage settlement to help plug a state budget hole, a move that drew criticism from Milwaukee's mayor and Democratic state lawmakers.

Attorney General J.B. Van Hollen's office made the decision in consultation with Gov. Scott Walker.

The rest of Wisconsin's share of the $25 billion national settlement will go toward helping homeowners who were affected by foreclosure abuses between 2008 and 2011.

Walker told a news conference that just like communities and individuals affected by the foreclosure crisis, the state also has been harmed, and the payment will go toward offsetting that. Walker previously has been critical of using so-called "one-time" money from legal settlements to balance the state budget.

He defended his own use of this settlement money by saying the foreclosure crisis had a "direct impact on the economy."

But Milwaukee Mayor Tom Barrett said that "not one dime should be used to fund the unbalanced state budget."

Democratic state lawmakers circulated a bill Friday that would require legislative approval before any of the money could be used to balance the budget. Republicans have majority control of the Legislature, so the proposal is unlikely to go anywhere.

A new projection released Thursday shows the state faces a $143 million budget shortfall by July 2013. Walker said his administration would plug the hole without the need to pass an emergency budget bill.

Barrett, a Democrat, is considering running against Walker, a Republican, in a possible recall election. Barrett lost to Walker in the 2010 governor's race.

Barrett said all of the $31.6 million coming to the state instead of directly to homeowners should be used for foreclosure mitigation programs in Milwaukee, a city that has had more foreclosures than any other in Wisconsin.

"The worst thing that can happen now is for the state of Wisconsin to employ its own bait-and-switch," Barrett said.

Van Hollen, a Republican, said Barrett was wrong to focus on just that one piece of the $140 million payment.

"The overwhelming majority of that $140 million is going to go to Milwaukee — is going to be able to help homeowners who are in trouble in Milwaukee, reimbursing homeowners who were foreclosed upon and shouldn't have been, preventing or remediating blight and creating jobs," Van Hollen said.

Wisconsin's share of the proposed settlement includes:

» Up to $60 million in benefits from loan term modifications and other direct relief for homeowners.

» About $17.2 million in uniform payments of up to $2,000 for eligible Wisconsin borrowers who lost their home to foreclosure from Jan. 1, 2008, through Dec. 31, 2011, and who sustained servicing abuses.

» About $31.3 million in refinancing benefits for eligible borrowers who are making payments but owe more than their home is worth.

The money is coming from Bank of America, J.P. Morgan Chase, Citigroup, Residential Capital and Wells Fargo & Co.