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By The Skanner News | The Skanner News
Published: 30 March 2010

PORTLAND, Ore. (AP) -- Oregon officials are trying to figure out how to spend $88 million the Obama administration has promised to help homeowners avoid foreclosed mortgages.
Oregon is among five states with pockets of high unemployment the administration targeted Monday for mortgage assistance -- to the surprise of state officials.
"We had no idea. We did not submit a proposal," said Lisa Joyce, a spokeswoman for the state Department of Housing and Community Services.
The agency's job is to figure out the details and send a plan to Washington for approval. It could be late summer or fall before money starts flowing, Joyce said.
Oregon was chosen because of its "concentrated areas of economic distress," the Obama administration said in a briefing paper.
Statewide, Oregon unemployment averaged 11.1 percent last year, but 14 of the 36 counties averaged 12 percent or more.
Many were rural and hurt by lost jobs in timber and wood products. A few were caught up in the collapse of the Central Oregon housing and construction boom.
The state has some latitude to spread the $88 million beyond the 14 counties, but a federal official said they should get the lion's share.
"Our expectation is that the hardest hit will get a disproportionate share of this," said Diana Farrell, deputy director of the National Economic Council.
State officials, she said, will have to figure out the wisest way to dole out mortgage assistance. "You could have a large number of folks helped a little bit, or a small number of folks helped a lot," she said.
The Obama administration's statistics showed that a third of the state's population lived in the 14 counties with the highest jobless rates: Columbia (13 percent), Coos (12.8), Crook (17.9), Curry (13.1), Deschutes (14.6), Douglas (15.4), Grant (13.4), Harney (16.1), Jackson (12.6), Jefferson (14.7), Josephine (14.2), Klamath (13.8), Lake (12.5) and Linn (13.7).
The state's three most populous counties had rates lower than 12 percent: Multnomah (10.4), Washington (9.3) and Clackamas (10.2).
Federal officials said the states have latitude to choose among ways to fashion their mortgage assistance. Some examples are:
_ Aid to help unemployed people make their mortgage payments for a few months until they find work.
_ Changing the terms of a loan or giving lenders incentives to write down part of the principal.
_ Helping homeowners and lenders make "short sales," for amounts less than the purchase price, to get people out of houses they can no longer afford.
The administration has been struggling to do more to deal with a tidal wave of foreclosures.
In February, the administration announced $1.5 billion in aid to five states where housing prices had deflated dramatically: Arizona, California, Florida, Michigan and Nevada.
Monday's announcement represents a second round of help to "the hardest hit," the administration said. Oregon is with four other states the administration screened by calculating the percentage of the state's population living in counties with high unemployment. The others are North Carolina ($159 million), Ohio ($172 million), Rhode Island ($43 million) and South Carolina ($138 million).
Farrell said the administration's goal is to sustain the economic recovery, not to salvage every homeowner done in by unemployment or falling house prices.
"I think we all want to be careful not to set expectations that this will help everyone across the country because it will not do that," she said.


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