Editorial: ODOT finds path around reverse-mortgage problem

It’s a feel-good story of an unusual type: A government agency found a way around its own rules and procedures to do the right thing for an elderly woman caught in a rare circumstance.

It didn’t look hopeful last year when 86-year-old Patsy Burnsed faced losing her house to an Oregon Department of Transportation project on U.S. Highway 26 designed to accommodate Intel’s expansion in Washington County.

The unusual twist came from Burnsed’s reverse mortgage, which had eaten up her equity, but provided she could live in the house rent-free. If ODOT had followed its usual procedures, the money it paid for the house near Helvetica would have gone to the bank, and Burnsed would have been out of luck. She would have lost her free housing, an unintended consequence of the intersection of a reverse mortgage and a road project.

Under that scenario, ODOT would have done what’s required by paying the value of the home it was taking. But Burnsed would not have been compensated for her loss.

Instead, ODOT researched the issue and found the circumstance was so unusual that few examples existed, according to a report in The Oregonian. Rather than sticking with regulations that didn’t anticipate this situation, officials went looking for a solution. Burnsed also had the help of property lawyer Jill Gelineau, who represented her for free.

Burnsed is now at home in a house in Hillsboro purchased for her use and owned by ODOT. She gets to live there for free as long as it is her primary residence. The solution costs ODOT more in the short-term, but the extra expense will likely be recovered, maybe more than recovered, when the house is later sold.

It’s heartening to see a large state bureaucracy respond so constructively. ODOT deserves credit for doing the right thing and setting an example for other agencies that encounter unusual situations affecting individual citizens.