Though it’s months away from awarding a single dollar to struggling homeowners, Oregon’s newly established foreclosure-prevention program keeps growing.
Oregon’s Homeownership Stabilization Initiative is in line to receive another $49.2 million, the U.S. Treasury Department announced Wednesday. That’s on top of the $88 million already awarded by the Treasury.
Oregon officials are still refining the details of its program and won’t be ready to begin dispensing money until the end of the year, said Michael Kaplan, director of the program.
“We’re thrilled,” Kaplan said. Even with the addition of the new money, he said, “we have so much more demand than we have resources.”
The foreclosure epidemic has claimed thousands in Oregon, largely due to the state’s high unemployment. Though it remains far behind foreclosure epicenters like Nevada and California in sheer numbers of foreclosures, Oregon is now seeing new mortgage defaults increase at the third-fastest rate in the country.
The new funding comes amidst a heated debate in Washington, D.C. about government spending and the spiraling federal deficit. While many economists argue the government needs to increase spending to jumpstart the economy, others maintain the country is drowning in red ink.
With the new anti-foreclosure money, the Obama administration is sending a clear signal it intends to continue to inject public money into the economy.
In addition to the new foreclosure prevention money, the Department of Housing and Urban Development announced Wednesday the launch of new $1 billion short-term loan program for at-risk homeowners.
The 24-month loans will be available to homeowners facing foreclosure in part due to “a substantial reduction in income due to involuntary unemployment, underemployment or a medical condition,” HUD announced.
Sen. Jeff Merkley, D-Ore., who has emerged as a vocal advocate for individuals slammed by the economic crash, hailed the new programs. “This funding will help Oregonians who have lost a job through no fault of their own while they get back on their feet,” said Merkley.
Obama first announced formation of the Hardest-Hit Fund in February, steering money to the 17 states most impacted by the foreclosure wave. The Treasury Department announced Wednesday that it is sending another $2 billion to the program, aimed at states where unemployment has remained high.
Qualifying standards for Oregon’s program are still being worked out, as are many of its details. Tentatively, the state envisions four different types of aid:
Loan modification assistance will 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 will help economically distressed homeowners pay their mortgages for up to one year.
Loan preservation assistance will provide financial resources that a homeowner may need to modify a loan, pay arrearages, or clear other significant financial penalties after a period of unemployment or loss of income.
Transitional Assistance will help homeowners who do not regain employment during the period of mortgage payment help with the resources needed to move to affordable, most likely rental, homes.