Part One 

Executive Summary

Oregon’s diverse economy is deeply interwoven with its unique geography. The state has 

become a vital shipping hub for companies exporting to and from the United States. 

Partnerships with California’s technology industry have been built and strengthened for 

more than twenty years. Public and private support and investment in green technology 

has made Oregon a leader in a quickly growing industry. Despite this diversity, much of 

Oregon’s economy remains rooted in timber, construction, and manufacturing. These 

industries, and the hardworking Oregonians who ensure they thrive, have suffered 

tremendously during the global economic downturn. As consumers throughout the world 

have decreased their demand for wood, paper, and many other products, Oregonians have 

lost their jobs and consequently, their homes. Oregon’s housing crisis is a reflection of 

the economic instability its workforce now experiences. 

As a recipient of second round funding from the Housing Finance Agency Innovation 

Fund for the Hardest Hit Housing Markets, Oregon Housing and Community Services 

(OHCS), the state’s Housing Finance Agency, will create the Oregon Homeownership 

Stabilization Initiative. This comprehensive plan will give qualified financially 

distressed homeowners the opportunity to avoid foreclosure and achieve the safety and 

stability of permanent affordable housing. The $88 million initiative will serve a 

minimum of 7,400 struggling homeowners. 

Oregon’s housing crisis has stranded homeowners across a wide spectrum of need. This 

proposal, developed after thorough data analysis and an extensive, statewide tour during 

which homeowners, lenders, loan counselors, and government officials described their 

experiences, will address many of those needs. The proposed programs will help 

homeowners in a variety of circumstances: 

 homeowners in the midst of financial distress due to unemployment, 

underemployment, or significant loss of income; 

 homeowners who have emerged from financial distress but require additional 

assistance to ensure permanent housing affordability; and 

 homeowners for who continued homeownership is not possible, who want to 

preserve their credit, and who need help transitioning to an affordable housing 

option. 

The four programs outlined in this proposal will work either as stand alone options or in 

concert. Many recipients will use more than one. The first program, Loan Modification

Assistance, will aim to help those homeowners who are on the verge of successfully 

modifying their existing mortgages but require a small amount of additional financial 

resources to do so. This program will aim to quickly stabilize more than 2,500 

homeowners in Oregon. The second program, Mortgage Payment Assistance, will help 

Oregon Homeownership Stabilization Initiative 2
economical distressed homeowners pay their mortgage for up to one year. If these 

recipients regain employment or otherwise regain their financial footing they can exit into 

program three: Loan Preservation Assistance. Loan Preservation Assistance will 

provide financial resources homeowners may need to modify their loan, pay arrearages, 

or clear other significant financial penalties they incurred while financially distressed. 

Should homeowners not regain employment during the period they received Mortgage 

Payment Assistance, they would be given the opportunity to receive Transitional 

Assistance. In such cases, Transitional Assistance will provide resources to help 

homeowners move to an alternative affordable housing option. 

In addition to these programs, the Oregon Homeownership Stabilization Initiative will 

use the state’s existing network of HUD certified counselors as an administrative entry 

point for many program participants. Counselors have the experience and resources 

necessary to navigate the loan modification process and other options that can lead to 

permanent housing affordability. 

OHCS has designed these programs to be flexible and responsive. Homeowners will be 

encouraged to enter or exit them in the ways that are most conducive to their long-term 

success. It is our intent to provide homeowners an opportunity to stay in their homes and 

to make those homes affordable. Should that outcome remain out-of-reach, Oregon 

Homeownership Stabilization Initiative will help them exit their homes in a way that will 

preserve the possibility of homeownership again in the future. 

Finally, after a thorough analysis of the economic downturn in Oregon, OHCS 

determined that the unemployment rate alone does not fully capture our state’s economic 

distress. OHCS considered three additional factors: the degree to which unemployment 

has increased over the previous two years, the decline in housing values, and the 

foreclosure rate. Using these expanded criteria, four additional counties were added to 

the initial 16. Allocating Hardest Hit funding using this more comprehensive 

methodology will allow OHCS to fully respond to the housing needs of the state. 

Establishment of an Eligible Entity

In accordance with the Hardest Hit Fund Guidelines published by the U.S. Treasury, each 

recipient of funding from the Hardest Hit Fund must qualify as an “Eligible Entity.” This 

is defined as a “financial institution,” as defined in the Emergency Economic 

Stabilization Act (EESA). Since OHCS is an agency of the State of Oregon, it is not an 

“Eligible Entity” for purposes of the Hardest Hit Fund. Thus, OHCS will be forming the 

Oregon Homeownership Stabilization Initiative, an Oregon nonprofit corporation.

Oregon Homeownership Stabilization Initiative 3
Part Two 

A. General Overview of the Program 

Oregon’s data suggests that unemployment and foreclosure are inextricably tied. During 

the economic downturn and over the course of the last 30 years, each time unemployment 

increases in Oregon, the state’s foreclosure rate increases by a similar amount. Though 

many factors contributed to the nation’s most serious economic downturn since the 

Depression, it has become increasingly clear that preventing foreclosure demands helping 

homeowners to manage the acute economic distress caused by unemployment. 

Though the nation’s economy is slowly rebounding from the economic downturn, data 

suggest the recovery will be largely a “jobless” one. History also indicates that Oregon’s 

recoveries from recession lag behind the rest of the nation’s. These facts have guided the 

development of the Oregon Homeownership Stabilization Initiative. 

Given the uncertain timeline of Oregon’s economic recovery and the realization that 

many of the jobs lost in the “hardest hit” counties may not return, the Oregon 

Homeownership Stabilization Initiative provides a comprehensive but measured and 

realistic approach to aiding homeowners in distress. 

During the development phase of this proposal, both empirical evidence and anecdotal 

data suggested that two significant obstacles plague Oregon’s homeowners: the 

complexity of the existing modification process and the duration of unemployment. 

Hardest Hit Funding will immediately address both. First, many homeowners struggle to 

successfully navigate loan modification programs. Either the loan modification process 

itself has frustrated them or their modification stalls due do a relatively small gap in 

financial resources. Second, unemployed, underemployed, and financially distressed 

homeowners often need up to a year to find financially appropriate employment. The 

time it takes to find a job far exceeds existing forbearance options offered by financial 

entities and those options often compound financial problems due to associated fees and 

penalties. Often by the time financially distressed homeowners find employment, they 

have exhausted their financial resources and cannot pay off overdue balances, fees, and 

penalties. In these cases, homeowners may even lack the credit and cash to move to a 

rental property. 

Program Objectives 

The overarching goal of the Oregon Homeownership Stabilization Initiative is to provide 

every funding recipient the opportunity to prevent foreclosure and keep or find affordable 

housing. To do that, OHCS has set the following program objectives: 

 Complement existing loan modification and foreclosure prevention programs. 

Oregon Homeownership Stabilization Initiative 4
 Encourage homeowners to use HUD-certified counseling services. 

 Facilitate swift, reliable, and consistent communication with lenders, servicers, 

investors, and other partners. 

 Relieve acute economic distress for homeowners. 

 Provide homeowners unable to maintain their home sound advice, resources, and 

encouragement to leave their house in favor of an affordable housing option 

before foreclosure occurs. 

 “Incentive-ize” homeowners’ commitment to maintaining their property after 

deciding leaving it is inevitable. 

 Connect homeowners that enter the program with links to other local and state 

resources such as job training, education, or other social services. 

 To the greatest extent possible leverage Hardest Hit dollars with private matching 

and revolving funding programs. 

 Work closely with lenders, servicers, and loan counselors to identify and invest in 

homeowners who stand the best chance of sustaining homeownership. 

 Deliver resources quickly. 

Program Descriptions

The programs that comprise the Oregon Homeownership Stabilization Initiative are 

meant to prevent foreclosure by investing resources on behalf of homeowners to ensure 

they will be able to achieve permanent, affordable housing. These programs are intended 

to be as flexible as possible in order to respond fully to the wide range of needs that 

homeowners in distress present. 

Pending U.S. Treasury approval, in accordance with EESA, and after extensive outreach 

with stakeholders throughout the state, OHCS intends to use its allocation of Hardest Hit 

Funding in the following ways. 

Loan Modification Assistance – The Loan Modification Assistance Program will 

provide funds to assist financially distressed borrowers who are in the process of 

modifying their home loans. Under the Program, a one-time contribution of funds will be 

made to a homeowner’s lender/servicer to be used to fill a financial gap that limits a 

homeowner’s eligibility for a loan modification. Funds may be used to reduce the 

outstanding principal balance, pay delinquent escrow, arrearages, or strategically apply 

resources to ensure a Net Present Value test is positive. Modification must result in a loan 

to value ratio of no more than 125 percent, a total debt-to-income of up to or less than 50 

Oregon Homeownership Stabilization Initiative 5
percent, and a mortgage payment of no more than 31 percent including principal, interest, 

taxes and insurance. The Program is designed to work with both HAMP and non-HAMP 

modifications.. 

Mortgage Payment Assistance – The Mortgage Payment Assistance Program will 

provide up to six months of mortgage payment assistance with a required 1:1 match from 

the investor for a total anticipated benefit of 12 months of assistance. It is expected that 

the investor match be provided concurrently with funds from the program. This 

temporary assistance will be provided lenders/servicers on behalf of unemployed, 

substantially underemployed, or acutely financially distressed homeowners. The state’s 

foreclosure counseling network would serve as the administrative entry point for initial 

eligibility screening. This Program will work as both a stand-alone program or as a feeder 

into Loan Preservation Assistance or Transitional Assistance Programs. 

For a comprehensive overview of this program, please refer to the Mortgage Payment 

Subsidy Term Sheet. 

Loan Preservation Assistance – Loan Preservation Assistance will benefit those 

homeowners who regain employment or recover from financial distress. The program 

will ensure their loans become, or remain, affordable. Resources provided through this 

program will ensure successful modification, pay arrearages, delinquent escrow, or other 

fees incurred during a period of unemployment or financial distress. Eligibility will be 

determined by HUD-certified counselors and staff from the Oregon Homeownership 

Stabilization Initiative. Recipients may receive up to $20,000. Loan Preservation 

Assistance may complement existing modification programs or other resources designed 

to assist homeowners after they regain their financial standing. 

For a comprehensive overview of this program, please refer to the Loan Preservation 

Assistance Term Sheet. 

Transitional Assistance – Transitional Assistance will be offered to those homeowners 

for whom foreclosure would otherwise be inevitable. Two groups of homeowners will be 

candidates for Transitional Assistance: homeowners with no reasonable prospect of 

modifying their loans even when employed and recipients of Mortgage Payment 

Assistance who do not regain employment or recover from financial distress to the extent 

that they would benefit from Loan Preservation Assistance. Transitional Assistance will 

work in conjunction with servicer/lender short sale and deed-in-lieu of foreclosure 

programs to help homeowners transition to affordable housing expediently. These 

resources will address the homeowner’s needs as well as help preserve property value. 

Funds would be available on a one-time only basis for up to $3,000. 

For a comprehensive overview of this program please refer to the Transitional Assistance 

Term Sheet. 

Oregon Homeownership Stabilization Initiative 6
Oregon Homeownership Stabilization Initiative 7
Oregon Homeownership Stabilization Initiative 
Overall Program Eligibility

Though the programs outlined in this proposal are intentionally broad to ensure the 

Oregon Homeownership Stabilization Initiative can respond to a wide variety of 

borrower needs, the general eligibility requirements are more tightly defined. 

Though there are some programmatic nuances, the general eligibility requirements are as 

follows: 

 Current household income is equal to or less than 120 percent of state 

median. 

 Only single-family homes are eligible. 

 Recipients must have experienced a verifiable significant loss of income, 

because of unemployment, underemployment, or financial distress. 

 Recipients must show capability to maintain mortgage after modification 

or loan preservation assistance. 

 Properties receiving resources must be owner occupied. 

 Loan must have been originated before January 1, 2009. 

Additionally, the Oregon Homeownership Stabilization Initiative will have programmatic 

exclusions: 

 Owners of second homes or investment properties. 

 Those who voluntarily left their jobs. 

 Those with liquid resources sufficient to pay their mortgage for four or 

more months. 

 Those who have not experienced unemployment, underemployment, or a 

significant and verifiable loss of income. 

 Those homeowners who have taken out second mortgages that cannot be 

verified as investments in the primary residence. 

Timeline

OHCS sought to design programs so they may be implemented quickly. The Oregon 

Homeownership Stabilization Initiative envisions a program delivery window of two to 

three years. The total length of the program will depend almost entirely on the speed in 

Oregon Homeownership Stabilization Initiative 9
Oregon Homeownership Stabilization Initiative 10

which financial entities process loan modifications or other complex transactions that 

lead to permanent mortgage affordability. During the extensive outreach OHCS staff 

conducted while developing this proposal, homeowners, loan counselors, and lenders 

indicated that the modifications took anywhere from six months to a year to complete. 

Nevertheless, this proposal aims to immediately push those homeowners on the verge of 

successful modification through the system within the first year of the program and to 

begin providing Mortgage Payment Assistance as soon as funding arrives from U.S. 

Treasury. 

The Transitional Assistance and Loan Preservation Assistance programs may also be 

enacted quickly, but these programs will serve as exits for those receiving Mortgage 

Payment Assistance and their substantial utilization should occur in year two of the 

program. 

B. Population Served and Allocation Methodology 

To address the unique challenge of allocating Hardest Hit Funding, OHCS incorporated 

additional factors to help fully identify economic distress in Oregon. In addition to the 

unemployment rate, OHCS staff added the degree of change in unemployment over the 

last two years, the rate of foreclosure and delinquencies, and the decrease in home values. 

Using the most current and reliable information available, from the Federal Reserve Bank 

of New York, Oregon’s Employment Department, and Federal Housing Finance Agency, 

each Oregon county was assigned a “Housing Distress” index based on a combination of 

these factors. 

Refining “Hardest Hit” using these methods revealed that four additional counties should 

be among those where a substantial majority of funding is focused. Including these 

additional counties among those initially identified addresses Oregon’s needs more 

completely. Expanding the field of “Hardest Hit” counties to 20 means that 73 percent of 

Oregon’s population is captured. This proposal recommends that 80 percent of Hardest 

Hit funding be applied to these 20 counties with the remaining 20 percent applied to the 

balance of the state. 

The following chart identifies the initial 16 Hardest Hit counties as well as the four 

OHCS identified as “Housing Distressed.” Additionally, the four factors used to 

determine “Housing Distressed,” are also included. 
US Treasury 

Hardest Hit

Housing 

Distressed County Housing Distress Index 2009 Population 2009 Unemployment Rate 2009 # Unemployed January 2010 % Loans in Foreclosure & 90+ Delinquent January 2010 # Loans in Foreclosure & 90+ Delinquent 2007-2009 % Change in Unemployme

Rate 

Baker County 0.7 16,450 10% 767 2.4% 26 74.1% Benton County 0.6 86,725 8% 3,348 1.8% 122 87.8% 

HD Clackamas County 1.0 379,845 10% 20,564 5.2% 2,512 121.7% 

Clatsop County 0.8 37,840 9% 1,850 3.6% 186 89.4% 

HH HD Columbia County 1.1 48,410 13% 3,216 5.6% 363 128.1% HH HD Coos County 1.0 63,065 13% 3,639 5.2% 258 93.9% HH HD Crook County 1.5 27,185 18% 1,695 9.9% 228 188.7% HH HD Curry County 1.0 21,340 13% 1,225 5.6% 88 101.5% HH HD Deschutes County 1.9 170,705 15% 11,853 9.0% 2,121 198.0% HH HD Douglas County 1.1 105,395 15% 7,201 5.2% 451 100.0% 

Gilliam County 0.5 1,885 7% 85 -- -- 55.6% 

HH Grant County 0.8 7,525 13% 461 2.1% 8 67.5% HH HD Harney County 1.0 7,715 16% 560 3.6% 14 120.5% 

Hood River County 0.7 21,725 8% 1,106 2.6% 63 75.6% 

HH HD Jackson County 1.4 207,010 13% 12,780 7.0% 1,764 125.0% HH HD Jefferson County 1.2 22,715 15% 1,371 8.5% 175 119.4% HH HD Josephine County 1.1 83,665 14% 5,007 7.1% 626 102.9% HH HD Klamath County 1.1 66,350 14% 4,289 6.1% 389 100.0% HH Lake County 0.7 7,600 13% 457 1.5% 6 73.6% HH Lane County 0.9 347,690 12% 21,761 3.8% 1,521 128.8% 

Lincoln County 0.8 44,700 10% 2,398 3.8% 236 89.1% 

HH HD Linn County 1.0 110,865 14% 7,622 4.8% 644 117.5% 

Malheur County 0.9 31,720 11% 1,403 3.9% 76 92.9% 

HD Marion County 1.0 318,170 11% 17,099 5.2% 1,733 101.9% 

Morrow County 0.7 12,540 9% 523 1.9% 12 72.2% 

HD Multnomah County 1.0 724,680 10% 40,536 4.7% 4,615 112.2% 

Polk County 0.8 68,785 9% 3,687 4.4% 379 87.8% Sherman County 0.6 1,830 9% 93 -- -- 77.6% Tillamook County 0.8 26,130 9% 1,198 3.4% 133 89.8% Umatilla County 0.7 72,430 10% 3,688 3.3% 189 63.8% Union County 0.9 25,470 11% 1,422 2.8% 56 105.5% 

HH Wallowa County 0.9 7,100 12% 440 3.0% 17 96.7% 

Wasco County 0.8 24,230 9% 1,242 3.4% 76 79.6% Washington County 0.9 527,140 9% 26,884 4.3% 2,955 116.3% Wheeler County 0.6 1,585 9% 57 -- -- 57.1% 

HD Yamhill County 1.1 95,250 11% 5,509 5.8% 611 128.0% 

Oregon Homeownership Stabilization Initiative 
0.0

0.51.01.52.02.53.03.5

Foreclosure Rate

Foreclosure Rate (by quarter)Unemployment Rate (seasonally adjusted, first mont

1980 

Oregon Foreclosure and Unemployment by Quarter1980-2009

Oregon Homeownership Stabilization Initiative 
Additionally, data suggest that Oregon’s minority communities have been more deeply 

affected by the economic downturn. OHCS plans to market Hardest Hit funding 

opportunities aggressively within these communities throughout the state. 

Current projections indicate that these programs will offer more than 6,300 homeowners 

in Oregon the opportunity to avoid foreclosure and achieve permanent affordable 

housing. 

Timeline for Implementation

Prior to implementation, OHCS must develop processes, install administrative 

infrastructure, train staff and partners, create reporting systems, and conduct a statewide 

outreach program. Though some of these objectives will require ongoing effort, OHCS 

anticipates they are substantially achievable within 120 days of final approval of U.S. 

Treasury. 

However, the programs contained within the Oregon Homeownership Stabilization 

Initiative are designed to peak at different times. Initially, OHCS plans to emphasize 

Loan Modification Assistance and Mortgage Payment Assistance early. Both programs 

will slowly phase out while the Loan Preservation and Transitional Assistance peak. 

OHCS echoes CalHFA’s request for advance funding to test each program and the 

associated reporting requirements prior to statewide launch. OHCS intends to initially 

test these programs on its own portfolio. 

Oregon Homeownership Stabilization Initiative 

Implementation Timeline 

Task Responsibility Date 

Complete Hardest Hit Fund Proposal OHCS Project Manager 6/1/10 

Complete Process to Establish Entity OHCS Director, Deputy, & 

Project Manager 

6/1/10-8/1/10 

Develop Position Description for Program 

Administrator 

OHCS Director, Deputy & 

Project Manager 

6/1/10 - 6/8/10 

Develop Position Description for Core 

Administrative Team: Human Resources, 

Senior Accountant, IT Coordinator, Outreach 

Contractor, Business Process Coordinator, 

and Researcher 

OHCS Director, Deputy, HR 

Manager, Policy & 

Communication Mgr, CFO, 

and CIO 

6/1/10 - 6/15/10 

Hire Program Administrator OHCS Director, Deputy 6/1/10-7/1/10 

Identify staffing location and procure office 

needs 

OHCS Facility 

Manager/Program 

Administrator 

7/1/10-9/30/10 

Hire core administrative team Various 7/1/10-8/15/10 

Oregon Homeownership Stabilization Initiative 13
Develop sub-allocations and methodology of 

program service delivery 

Program Administrator & 

Researcher 

7/1/10-8/31/10 

Complete business mapping of all programs 

and processes 

Program Administrator and 

Business Process 

Coordinator 

60 days from 

proposal 

approval 

Implement Outreach Plan Outreach Contractor Upon 

completion of 

business 

mapping 

Develop and Implement Contracts with HUD 

Certified Counselors 

Program Administrator 60 days from 

proposal 

approval 

Complete recruitment for Program 

Specialists 

Program Administrator 75 days from 

proposal 

approval 

Complete IT procurement Program Administrator/IT 

Coordinator 

75 days from 

proposal 

approval 

Complete Training of HUD Certified 

Foreclosure Counselors 

Training Contractor 90 days from 

proposal 

approval 

Staff Training Core Administrative Staff 100 days from 

proposal 

approval 

Test program with pilot locations Program Specialist 120 days from 

proposal 

approval 

Implementation of all programs Program Specialist 150 days from 

proposal 

approval 

Implementation Obstacles

Throughout the proposal development process, borrowers and lenders have been 

unequivocal in their support for additional HUD Certified counseling services for 

homeowners. OHCS staff believe that without counseling, homeowners are not equipped 

with the information they need to make sound decisions about homeownership. The 

complexities of working with lenders and servicers are such that for the inexperienced, 

the process has been very frustrating. 

To ensure that the Oregon Homeownership Stabilization Initiative succeeds, homeowners 

need comprehensive information that allows them to consider all of their options. 

Further, as the programs proposed in this document will work directly with existing 

federal programs, or complement other state and local resources, it is vitally important to 

Oregon Homeownership Stabilization Initiative 14
have capable professionals navigating the process for homeowners. Homeowners will 

continue to experience frustration with banks, complex modification procedures, and may 

have a harder time leaving their home, should ownership not remain possible, without the 

help of a counselor to explain and help them explore all available options. 

Without HUD Certified Counselors, these programs will not function as effectively or 

efficiently. However, given the depth of the housing crisis in Oregon already, the states 

counselors are nearing their caseload capacity. Therefore, as part of our administrative 

budget, OHCS proposes that HUD certified counselors serve as the entry point for our 

Mortgage Assistance, Loan Preservation, and Transitional Assistance programs. 

By using counselors in this role, OHCS saves itself the time and expense of setting up 

offices throughout the state. Also, sharing the administrative burden with the existing 

counseling network will allow OHCS to speed the delivery of resources. A trained 

counselor will perform intake duties, evaluate eligibility, and make an initial funding 

decision. Oregon Homeownership Stabilization Initiative staff will then make final 

funding determinations. 

Additionally, though the Oregon Homeownership Stabilization Initiative will help 

thousands of Oregonians, these resources cannot help everyone in need. OHCS 

anticipates that by establishing and marketing these programs, even those who are not 

eligible will seek help in the hopes that they are. An ancillary benefit of engaging the 

state’s HUD-certified counseling network is that it can steer ineligible homeowners to 

other helpful resources. 

The state’s network of HUD-certified foreclosure mitigation counselors has a long 

history of helping Oregonians become successful homeowners. OHCS and the regional 

housing centers across Oregon have years of experience providing foreclosure counseling. 

Counseling services include developing and verifying client budgets, developing and 

following up on written client action plans, and working with servicers to determine 

alternatives to foreclosure. These organizations have an extensive, successful, and recent 

record of accomplishment in providing foreclosure intervention counseling services. 

Leveraging Resources

The Oregon Homeownership Stabilization Initiative will operate by the principle that 

addressing the housing crisis requires a collaborative effort between the homeowner, the 

lender, and state and local government in which all parties contribute to a solution. 

To the greatest extent possible, the Oregon Homeownership Stabilization Initiative will 

partner with financial institutions to maximize Hardest Hit funding. As an overarching 

goal, OHCS will work toward a dollar-for-dollar match of funding. Substantive 

negotiations with partners will begin once U. S. Treasury provides final approval of this 

proposal. To date, discussions with financial institutions have been productive, but 

relatively inconclusive. A few financial institutions with particularly toxic portfolios 

Oregon Homeownership Stabilization Initiative 15
have offered to match at rates much higher than 1:1. Given the proposal development 

time constraints, only the very large financial institutions have contributed significantly 

to the discussion of match. After the proposal submission, Oregon Homeownership 

Stabilization Initiative staff will engage Oregon’s state and local banks and credit unions. 

Though their portfolios are generally more conservative and include fewer mortgages, 

OHCS will explore their willingness and capacity to match these dollars. 

Additionally, two of the programs OHCS proposes, Loan Modification Assistance and 

Loan Preservation Assistance are conceived as revolving loan programs. Although 

current models do not project a substantial portion of the funds revolving, creating the 

opportunity and program flexibility for them to do so will allow for a further leveraging 

of funds and, ultimately, more financially distressed homeowners will receive help. 

Loans Financed With Tax-Exempt Bonds

While some of the programs described in this proposal require lenders to participate 

financially, loan programs financed with proceeds from tax-exempt bonds have legal and 

program limitations that make such participation difficult for housing finance agencies 

such as OHCS. 

First-time homebuyer programs developed by OHCS are financed in whole or in part 

with the sale of bonds that are tax-exempt under IRC section 143. Such bonds are subject 

to a variety of public purpose restrictions imposed by federal tax law. In addition, the 

bond indentures in which these loans are held may contain terms that are substantially 

different from the securitizations found in the commercial market. The combination of 

those tax rules and unique indenture terms may make it much more difficult for a taxexempt bond issuer to modify the loans. These restrictions may directly affect the ability 

of some public issuers to implement certain program terms required of private lenders, 

particularly with respect to matching principal reductions. 

These bond issues also have specific durations, generally coincident with terms of the 

originated mortgages, and defined interest rates. Bond investors have a legal right to 

repayment based on the interest rate and maturity date of the bonds and their underlying 

mortgages. In situations where the term of a mortgage extends past the term of the bond 

series, OHCS would be forced by indenture terms to retire that related portion of 

outstanding bonds from sources other than the repayment of the mortgage. In addition to 

the issue of maturity, reductions in interest rate also impact OHCS bond holders who are 

expecting cash payments based on their stated coupon rate, and OHCS would likely need 

to expend additional cash to make up any shortfall in interest payments caused by a loan 

modification required interest rate reduction. Such funds are not available. Principal 

reductions for delinquent loans also presents difficulties for OHCS, as these mortgages 

are whole loans and are not securitized whereby investors do not have any guarantee of 

scheduled payment of principal and interest outside of the covenants of the bond 

indenture. 

Oregon Homeownership Stabilization Initiative 16
For these and other reasons described in HHF proposals previously received by the U.S. 

Treasury, OHCS is proposing that the matching requirement for the use of federal dollars 

available in this program not be required for loans financed with proceeds of tax-exempt 

bonds issued under its single-family mortgage program. Specifically, any matching 

requirement under the Oregon Homeownership Stabilization Initiative contained in this 

proposal would be waived for mortgage loans held within an indenture that contains 

loans financed in whole or in part by bonds issued by OHCS that are tax-exempt under 

IRC section 143. 

Under this exemption, OHCS would work with its servicers to identify any distressed 

borrower in its loan program and facilitate the process of involving the borrower in the 

appropriate program described in this proposal. 

C. Demonstrated Capacity to Implement 

Experience of Key Staff

Oregon Housing and Community Services is Oregon's housing finance agency, providing 

financial and program support to create and preserve opportunities for quality, affordable 

housing for Oregonians of lower and moderate income. 

 

The current agency was created in 1991, when the state’s legislature merged the Oregon 

Housing Agency with State Community Services. The coordination between housing and 

services creates a continuum of programs that can assist and empower lower-income 

individuals and families in their efforts to become self-reliant. 

 

OHCS administers federal and state antipoverty, homelessness prevention, low-income 

energy assistance, and community service programs. The agency also assists in the 

financing of single-family homes, the new construction or rehabilitation of multifamily 

affordable housing developments, as well as grants and tax credits to promote affordable 

housing. 

Currently, OHCS is staffed by a senior management team with extensive experience 

addressing housing affordability issues in Oregon: 

Victor Merced, Director

Prior to joining the Department in September, 2006, Mr. Merced worked as a 

Philanthropic Advisor and Organizational Consultant to non-profit organizations and 

foundations. From November, 1995 to October, 2005, he was a Senior Program Officer 

for the Meyer Memorial Trust, Oregon’s largest private foundation. From 1990 to 1995, 

he served as Deputy Administrator for the Adult and Family Services Division in the 

Oregon Department of Human Resources. He has also served as Executive Director of 

the Oregon Council for Hispanic Advancement and Chairman of the Board of 

Commissioners for the Housing Authority of Portland. Earlier in his career, Mr. Merced 

Oregon Homeownership Stabilization Initiative 17
worked as an attorney and also spent four years as Director of Operations for a non-profit 

organization in New York. Mr. Merced received his Bachelor of Science majoring in 

Housing and Urban Development from Herbert H. Lehman College of the City 

University of New York in 1982 and his Juris Doctor degree from New York University 

School of Law in 1985. 

Rick Crager, Deputy Director 

Prior to assuming this position as of March, 2006, Mr. Crager served as Chief Financial 

Officer from July, 2000 to February, 2007 and Financial Services Section 

Manager/Investment Portfolio Manager from February, 1998 to July, 2000. Prior to 

joining the Department, Mr. Crager worked for the Oregon Commission on Children and 

Families as its Accounting and Budget Manager. He also worked for four years for the 

Oregon State Marine Board as the Accountant. He received his Bachelor of Science in 

Accounting from Linfield College in 2002. 

Robert Gillespie, Administrator: Housing Division 

Prior to assuming this position, Mr. Gillespie served as Manager of the Department’s 

Housing Resources Section from October, 1994 to September, 2000. He has also served 

as a regional field representative and the Community Housing Planner for the 

Department. Prior to joining the Department in December, 1990, Mr. Gillespie worked in 

affordable housing for the cities of Salem and Corvallis, Oregon, and managed his own 

construction company for 11 years. He received a Bachelor of Science from the Oregon 

State University and a Master’s in Urban Planning from the University of Illinois. 

Nancy Cain, Chief Financial Officer of the Department 

Prior to assuming this position in February, 2007, Ms. Cain served as Financial 

Operations Manager from October, 2006 to February, 2007 and Debt Officer from May, 

1995 to October, 2006. Prior to joining the Department in May, 1995, Ms. Cain worked 

for 14 years with the Secretary of State, Audits Division as an auditor and has been a 

Certified Public Accountant since 1984. She received her Bachelor of Science in 

Business Administration from the University of Oregon in 1981, majoring in Accounting. 

William Carpenter, Chief Information Officer 

Prior to assuming this position in August, 2001, Mr. Carpenter served as the Information 

and Technology Services Manager for the Department of Consumer & Business Services, 

State of Oregon, from November, 1995 through July, 2001. Mr. Carpenter also has many 

years experience as a research analyst and econometric forecaster. He received his 

Bachelor of Science degree from Willamette University and a graduate degree in Social 

Psychology from the State University of New York at Buffalo. He is also certified as a 

Project Management Professional by the Project Management Institute. 

Roseanne Ward, Financial Services Manager 

Prior to assuming this position in December, 2004, Ms. Ward served as the Debt Analyst 

in the Debt Management Division of the Oregon Office of the State Treasurer since 

October, 2001. She also worked as the Department’s Debt Officer from July, 1998 

through October, 2001. Prior to joining the Department in 1998, Ms. Ward worked as an 

Oregon Homeownership Stabilization Initiative 18
Accountant for six years at other State agencies. She received her Bachelor of Science in 

Business Administration from Oregon State University in 1991, majoring in Accounting. 

Robert Larson, Debt Manager 

 Prior to joining the Department in September, 1993, Mr. Larson served as a Senior 

Auditor with the Secretary of State Audits Division. He received his Bachelor of Science 

in Business Administration from the University of Oregon in 1983, majoring in 

Accounting and Finance, and is a Certified Public Accountant. 

Lisa Joyce, Policy and Communication Manager 

Ms. Joyce’s focus has been policymaking, legislative relations, and support for advocates 

and partners. Prior to joining the OHCS in 2004, she served in the Department of 

Consumer and Business Services as an insurance consumer advocate. She served as the 

Legislative Relations Manager for the Oregon Department of Human Services. She has a 

Bachelor of Arts in History from Reed College and a Certificate in Public Management 

from Willamette University. 

OHCS currently administers existing programs funded by the U. S. Treasury, the U.S 

Department of Housing and Urban Development, the U.S. Department of Energy, and the 

United States Department of Agriculture, among others. Moreover, during the course of 

the past 15 months, OHCS has been the lead Oregon State agency on a variety of 

American Recovery and Reinvestment Act programs. Among these were the 

Neighborhood Stabilization Program, which deals deeply with foreclosure issues, and 

Low Income Weatherization program. The expertise gained partnering with such a 

diverse group of federal partners and administering such a wide range of programs 

provides the ideal road map for creating the Oregon Homeownership Stabilization 

Initiative. OHCS has experience training partners, communicating to stakeholders across 

the state, fostering relationships with program delivery personnel, and imparting the 

importance of spending dollars intended to relieve economic distress quickly, while 

maintaining high levels of transparency and accountability. 

Compliance, Audit, Internal Controls, Risk Mitigation, Reporting

In preparation for the receipt of Hardest Hit funding, OHCS has assembled an 

administrative team comprised of the agency’s CFO, Internal Auditor, budget, and 

programmatic staff. This team is currently working to design compliance infrastructure, 

reporting protocols, audit procedures, and internal controls. To the greatest extent 

possible, OHCS will develop these tools with and modeled on existing resources. 

However, based on the anticipated flow of funding, the wide range of potential partners, 

and the administrative and programmatic necessity to partner with the state’s HUD 

certified counselors, new technology and procedures will inevitably require development. 

Both are currently anticipated within the Oregon Homeownership Stabilization 

Initiative’s administrative budget. 

Oregon Homeownership Stabilization Initiative 19
The Hardest Hit Fund is subject to the requirements of the Emergency Economic 

Stabilization Act of 2008, including but not limited to, allowing full compliance and 

oversight by the U.S. Treasury, the Comptroller General of the United States, 

Government Accountability Office, Congressional Oversight Panel, and the Special 

Inspector General of the Troubled Asset Relief Program. OHCS will develop procedures 

that ensure compliance with EESA and include appropriate internal controls. All books 

and records will be made available to the parties listed above. 

OHCS will establish a reservation system to ensure that resources are not over allocated. 

Commitments will be monitored at the program level. The reservation system will also 

limit the amount of assistance any one household can receive. The Senior Accountant 

and Program Administrator will closely monitor the status of Hardest Hit Fund resources. 

Financial entities and HUD-certified counselors will determine eligibility for Oregon 

Homeownership Stabilization Initiative programs and will submit requests for assistance 

to OHCS. Financial entities may only request funds under the Modification Program. 

Counselors will work with homeowners to determine the most appropriate plan of action. 

The recommended plan of action will be confirmed by Oregon Homeownership 

Stabilization Initiative staff. They will also review the request for assistance for 

eligibility and expenditure feasibility. Supporting documentation, including proof of 

ownership of the property, must be submitted prior to approval. 

It is in the best interest of the financial entities and foreclosure mitigation counseling 

organizations to ensure that all assistance is in compliance with program requirements. It 

is also expected that these organizations will have procedures in place to prevent fraud. 

To validate that appropriate controls exist, Compliance Monitors will conduct audits of 

randomly selected payments for compliance with program requirements. These audits 

will include reviews of original documents contained in files. OHCS will take 

appropriate action if issues or concerns are identified. 

The Hardest Hit Fund will be subject to audit by OHCS’s Internal Auditor. Follow up 

may include additional monitoring at the loan servicer or foreclosure mitigation 

counseling organization. The budget also contains significant resources for legal counsel. 

OHCS will obtain an independent verification that proper controls are in place and 

maintained prior to and during program implementation as required by program 

guidelines. 

The current administrative budget also anticipates the need for additional auditing staff. 

Because Troubled Asset Relief Program dollars will flow through the State of Oregon in 

a new way, it is important from both program success and transparency perspectives that 

our auditing functions are robust and responsive. 

Currently, staff envisions a reporting structure similar to those of other federal programs 

operating within the department. Ideally, reporting should capture how Hardest Hit 

Oregon Homeownership Stabilization Initiative 20
funding was expended by the Oregon Homeownership Stabilization Initiative, through 

lenders or servicers, and to homeowners. OHCS intends to capture performance-based 

data that the department can use to develop future programs, as well as demographic data 

that we hope to share with other state agencies that currently assist Oregonians in 

financial distress. OHCS staff request that U.S. Treasury develop reporting guidance, or 

facilitate a work group with the other Hardest Hit States to ensure a broad level of 

consistency. 

D. Staffing Plan 

Given the depth and length of the housing crisis that Oregon continues to face and the 

value of spending dollars that may help stabilize a volatile market quickly, the Oregon 

Homeownership Stabilization Initiative has constructed an aggressive administrative 

structure. OHCS intends to deliver these dollars to Oregon homeowners within two and a 

half years of receipt of funds. To achieve this goal, the staffing plan is based on 

responding to the anticipated peaks of the proposed programs and extensive preparation 

and outreach in Oregon before funds arrive. 

The following staffing plan reflects these goals. 

Program Staff 

Position Description of Duties Number 

and 

Duration 

Program 

Administrator 

Responsible for operation and oversight of the Oregon 

Homeownership Stabilization Initiative. Oversees 

marketing of program, establishes business contacts, and 

hires lead workers. 

1 full time 

for 3 years 

Intake 

Personnel 

Staff a call center, receive program inquiries and 

provide information and referral to borrowers, general 

public, business partners. 

2 full time 

for 1.5 

years 

Senior 

Accountant 

Develops initial mapping of fiscal process. Works in 

conjunction with Senior Program Manager to establish 

fiscal and program processes and guidelines. Trains 

other accounting staff and oversees work, completes 

final accounting at program closing. 

1 full-time 

for 3 years 

Accounting 

Staff 

Account for program funds including processing 

payments and program reporting, 

1 full-time 

for 2 years 

2 half-time 

for 2 years 

Oregon Homeownership Stabilization Initiative 21
Human 

Resource 

Analyst 

Assists with hiring staff. 1 full-time 

for 1 year 

Information 

Technology 

Staff 

Provides support and maintenance for program systems 1 full-time 

for 2 years 

Senior 

Compliance 

Monitor 

Develops monitoring process, trains additional monitors, 

and conducts monitoring of activities and business 

partners to ensure compliance with federal regulations 

and program rules. 

Full-time 

for 3 years 

Compliance 

Monitors 

Conduct monitoring of activities and business partners 

to ensure compliance with federal regulations and 

program rules. 

2 full-time 

for 2 years 

Research 

Analyst 

Continual research and monitoring of foreclosure, 

unemployment and delinquency rates for allocation 

plan, gathers data for reporting. 

1 half-time 

for 2 years 

Program 

Manager 

Maps the initial business process for each program. 

Works in conjunction with Senior Accountant to 

establish program and fiscal processes and guidelines. 

Oversees day to day operations of various program 

activities. Develops and manages contracts with 

foreclosure counselors and oversees disbursement of 

contract resources. Oversees program reporting. 

1 full-time 

for 3 years 

Senior Loan 

Specialist 

Supervises all program activities. Works with Program 

Manager on development of program guidelines and 

processes. Develops program forms and documents. 

Trains other loan specialists and oversees work. 

1 full time 

for 3 years 

Loan Specialists Process applications for loan modifications, mortgage 

assistance, and loan preservation assistance. Take 

requests, review for eligibility, recommend 

approvals/denials, complete loan documents, process 

funding requests, collect data for reporting, and close 

out files. 

3 full-time 

for 3 years 

11 fulltime for 

one year 

Administrative 

Specialists 

Provide program and clerical support. Data 

management. 

1 full-time 

for 3 years 

1 half-time 

for 1 year 

Program 

Manager 

Oversees Transitional Assistance Program. Takes 

requests, reviews for eligibility, recommends for 

funding, completes grant documents, processes funding 

requests, collects data for reporting, and closes out files. 

1 full-time 

for 2.5 

years 

Oregon Homeownership Stabilization Initiative 22
Administrative Budget

 Hardest Hit Initiative 

Expenses 

Personal Services for Startup Activities $ 72,654 

Legal Expenses $ 70,000 

Contracted Services $ 40,000 

Information Systems $ 300,000 

Outreach $ 300,000 

Audits $ 125,000 

Accounting and Financial Statement 

Preparation $ 125,000 

Corporate Insurance $ 100,000 

Call Center $ 165,000 

Recording Fees $ 450,000 

Hardest Hit Initiative Total $ 1,747,654 

OHCS Expenses 

Personal Services (includes employment related 

expenses) $ 4,225,254 

Rent $ 248,244 

Furniture, Computers, Telephones $ 262,014 

Legal Expenses $ 305,000 

Office Supplies and Expenses $ 169,010 

Staff Training $ 45,000 

In State Travel $ 75,000 

Out of State Travel $ 12,824 

Wire Transfers $ 210,000 

Contingency $ 150,000 

OHCS Total $ 5,702,346 

Total Administration $ 7,450,000 

Oregon Homeownership Stabilization Initiative 23
OREGON HOUSING AND COMMUNITY SERVICES

Director

State Housing Council

Community Action

Programs of Oregon

Deputy Director

Housing

Division

Financial Management

Division

Community Services

Division

Asset and Property

Management

Division

Oregon H

Stabiliza

Co

Entity 

Receive Ha

Contrac

Information Services

Division

Overa

Adm

Program Manager Outreach Call Center Financ

Mortgage Modification Mortgage Assistance Transitional Assistance Revolving Loan Program

Oregon Homeownership Stabilization Initiative