The long Erpenbeck nightmare for 132 homeowners with liens against their new homes is about to end.

Lenders, title companies and title insurance companies have signed an agreement in principle to settle a class-action lawsuit and remove $17.3 million in liens so homeowners at last will hold clear title.

The Erpenbeck scandal broke in March 2002 when it was discovered that checks to pay off construction loans at house closings had been diverted allegedly into Erpenbeck Co. accounts at Peoples Bank of Northern Kentucky. Erpenbeck employees, including former president Bill Erpenbeck, are the focus of a federal criminal investigation of the fraud. More than 50 of the liens have already been settled, and according to lawyers at a hearing before Boone Circuit Judge Jay Bamberger, once final settlement papers are signed in a week or so, all the liens will be removed, and victimized homeowners will have been made whole.

"This is an example of the judicial system working," said Cincinnati lawyer Stan Chesley, who represented homeowners in the class-action lawsuit.

Because of Peoples Bank's exposure to the Erpenbeck deals, it was forced to liquidate and will use money from its July sale to The Bank of Kentucky to pay 70 percent of the settlement costs.

Four banks that made major construction loans to Erpenbeck - Peoples, US Bank, Bank One and Provident - will pay another 10 percent.

Eight title insurance companies will pay 10 percent.

Twenty-two title insurance companies that served as closing agents also will pay 10 percent.

If Bill Erpenbeck is guilty, he unfortunately is not paying any of the settlement. Most of the $1.5 million raised March 15 by public auction of his former home in Crestview Hills and his belongings will go to pay off mortgages on that property. The settlement also does not include homeowners who paid cash for Erpenbeck homes and are still seeking legal remedies to remove liens against their properties.

The Erpenbeck collapse alerted homebuyers here that routine title insurance required at closings protects lenders but not homebuyers. Many now wisely buy additional owner's title insurance. Along with the settlement, it's more evidence the Tristate is recovering from the Erpenbeck shock wave.