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Oregon to Use $88M in Hardest Hit Funding to Help 6,300 Homeowners

""Oregon Housing and Community Services"":http://www.ohcs.oregon.gov/ (OHCS), one of five state housing finance agencies selected to receive foreclosure assistance funds through the second round of the administration's Hardest Hit Fund, has submitted a ""proposal"":http://www.oregonhomeownerhelp.org/OHCS/Recovery/pdfs/HHF_Proposal.pdf to the Treasury Department detailing how it plans to use its $88 million allocation.

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""As DSNews.com previously reported"":http://dsnews.comarticles/obama-pledges-15b-for-unemployed-and-underwater-homeowners-2010-02-19, the administration initially alloted $1.5 billion in aid through the Hardest Hit Fund to be divided between California, Nevada, Arizona, Florida, and Michigan. And in late March, the administration said it would ""disburse a second round of funding"":http://dsnews.comarticles/five-more-states-to-receive-federal-funding-for-mortgage-programs-2010-03-29, totaling $600 million, to five additional states, including North Carolina, Ohio, Oregon, Rhode Island, and South Carolina.

The administration has labeled these 10 states as areas ""hardest hit"" by the bursting of the housing bubble, due to declining home values and high rates of unemployment. But in order to receive the aid allocated through the Hardest Hit Fund, each state was required to submit a proposal to the Treasury Department outlining how the funding will be used.

After holding a series of forums throughout the state to listen to homeowners' concerns, OHCS designed the Oregon Homeowner Stabilization Initiative, which comprises five programs specifically designed to help protect people who

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are recently unemployed, underemployed, or have lost a significant amount of income.

The department said these five programs will work either as stand-alone options or in concert, as many recipients will use more than one. In total, OHCS said its initiative will serve a minimum of 6,300 struggling homeowners.

The first program, Loan Modification Assistance, will aim to help homeowners who are on the verge of successfully modifying their existing mortgages but require a small amount of additional financial resources to do so.

Mortgage Payment Assistance, the second program outlined in the proposal, will help economically distressed homeowners pay their mortgages for up to one year. And if these recipients regain employment or otherwise restore their financial footing, they can exit into a third program.

This third program, Loan Preservation Assistance, will provide financial resources the homeowner may need in order to modify a loan, pay arrearages, or clear other significant financial penalties.

Should homeowners not regain employment during the period of Mortgage Payment Assistance, they will have the opportunity to receive help through a fourth program: Transitional Assistance. In such cases, this program will provide resources to help homeowners move to affordable, likely rental, homes.

The fifth and final program, Loan Refinancing Assistance, is a pilot project designed to address the needs of low- to moderate-income homeowners in counties experiences dramatic declines in housing values. The department said it is looking to partner with organizations that will purchase underwater home loans at discounted rates and then restructure and/or refinance those loans as affordable mortgages.

""We want to keep homes affordable and prevent foreclosure for as many Oregonians for whom that is possible,"" said Victor Merced, director of OCHS. ""It's our goal to respond to areas most affected by the worst crisis.""

About Author: Brittany Dunn

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