PORTLAND — A state program to help prevent foreclosures has struggled to efficiently distribute more than $220 million in federal taxpayer money to Oregon homeowners, the Oregonian newspaper reported.
The Oregon Homeownership Stabilization Initiative awarded $1.7 million to 242 homeowners who were later determined to be ineligible for the program. The state has made no effort to recover the money, the Oregonian reported Sunday.
The program also paid $750,000 to a private company headed by former Portland City Commissioner Erik Sten to help homeowners refinance their mortgages. While the program shows promise, only 11 mortgages have been refinanced after more than a year.
More recently, a U.S. Treasury review completed in April “indicates that there is more work to be done” for Oregon.
Margaret Van Vliet, who oversees the anti-foreclosure program, says the agency is slowly getting its act together. Gov. John Kitzhaber installed her in October to fix the agency.
“It’s been a pretty big learning curve,” said Van Vliet, director of Oregon Housing and Community Services. “We didn’t have the staff or the systems in place. It was a pretty ugly set of circumstances that overwhelmed the agency.”
Oregon is one of 19 states nationwide to receive money from the U.S. Treasury’s Hardest Hit Fund. First announced in February 2010, it was another attempt by the Obama administration to provide meaningful foreclosure prevention assistance.
Oregon got $220 million of the Treasury’s $7.6 billion fund.
Compared to many of the other states, Oregon has been dishing out money, second only to California. As of March, the state has distributed $49.8 million to 4,579 homeowners, the Oregonian reported.
The state adopted a streamlined underwriting process that later proved to be a major mistake.
Officials later determined that some of their new customers actually were not eligible. The state terminated 242 homeowners from the program. By that time, the state had extended them more than $1.75 million in assistance.
There was little doubt the applicants were in financial straits sufficient to qualify for the program, but they lacked documentation necessary to prove it, agency spokeswoman Karen Tolvstad told the Oregonian.
For that reason, the state felt it was “inappropriate” to pursue the money, Tolvstad said, adding that U.S. Treasury officials agreed.
As state officials attempted to fix their in-house programs, a more challenging undertaking was launched to help homeowners who owe more on their mortgage than their home is worth.
Sten’s Further Development was hired to develop a loan refinance program for underwater homeowners. The company proposed the Loan Refinancing Assistance Pilot Project that is available only in Deschutes and Jackson counties.
After months of back and forth, Sten said the U.S. Treasury and the state finally signed off on the program in January and February. Since then, Further has closed 11 deals.
Sten argues that as the kinks get worked out, volume will quickly increase. But at this point, Further has received $750,000 for just 11 deals.
“If they can make this work, it could be huge,” Van Vliet said. “But I don’t have the luxury of paying a flat fee.”
Get daily headlines to your inbox
Start your day with our top stories delivered to your inbox every morning.
The holiest plant of the Christmas season may be a raggedy shrub with peeling bark that seems to grow best in a dusty backyard in Tempe, Ariz. This is Boswellia sacra, better known as the frankincense tree. The shrub’s gum resin is one of the three biblical gifts that the wise men bestowed on the infant Jesus. Until recently, Americans who wished to cultivate their…
The reality: That is not true, said Dr. Richard Koller, a Bend neurologist. A sneeze does increase the pressure inside the skull a little bit, he said. People have worried that sneezes may kill brain cells because other things that increase pressure on the brain, such as some types of stroke, can lead to brain cell death or even the death of the person. However,…
ST. GEORGE, Utah - Zach Bowers' cultural education included a battle of wills over a simple task: how to mop the kitchen floor. Just when the teenager thought he was done with the weekly chore, Debbie Hofhines would loom like a drill sergeant, demanding to know whether he'd used enough cleaner. In response, Zach grumbled, slammed drawers and disappeared with friends. ”At first, she was…
It's certainly not an age-old dilemma, but no doubt this question is caroming around in many a Central Oregonian's brain right about now: What to get the dog who has everything?Gone are the days when Rover skulked just outside the campfire's glow, hoping against hope that someone would toss a bone his way. These days, Bear and Shasta are probably parked directly beneath the family…
In this occasional feature, we explore the origins of Central Oregon place names. To suggest a place name for explanation, contact Julie Johnson, jjohnson@bend bulletin. com or 541-383-0308. What: Three Sisters family of volcanoes Where: Cascade Mountains west of BendIt's no secret that the Three Sisters define Bend's alpine skyline. Majestically snow-capped in the winter, starkly fascinating in the summer, the mountains are three links…