A pilot program in Multnomah County could go nationwide.
Oregon’s Senator Jeff Merkley and the Oregon Housing and Community Services Department announced that the U.S. Treasury Department has approved a new pilot program to help underwater homeowners in Oregon’s Multnomah County. This pilot draws elements from Merkley’s Rebuilding American Homeownership proposal released in the summer of 2012.
OHCS will use money awarded by the U.S. Treasury’s “Hardest Hit” program to fund the pilot. The department considered various strategies to assist underwater homeowners in Multnomah County, and selected this model to help underwater homeowners as a highly promising approach.
The program will allow underwater homeowners who are current on their payments to refinance into lower-rate loans. Underwater borrowers without Fannie Mae or Freddie Mac loans are not eligible for current refinancing assistance programs and are unable to refinance into more affordable mortgages, as they have no home equity to use as collateral for a new loan.
“I am thrilled that Oregon is leading the way in finding innovative ways to help American homeowners,” said Merkley. “Refinancing underwater loans is good for homeowners, their communities, and our broader economy. We need to do everything we can to prevent more foreclosures and put more cash back into the pockets of middle class families in Oregon. Helping families into affordable, fixed-rate loans accomplishes both.
“I look forward to seeing this pilot program get underway and provide a model to other states struggling to get housing markets back on track.”
“Senator Merkley's leadership on foreclosure issues will open the door to refinancing for a new set of struggling homeowners,” said Margaret Van Vliet, Director of the Oregon Department of Housing and Community Services. “We're excited to help pilot a program that may serve as a national model for foreclosure programs around the country.”
Oregon is the first state to create such a pilot program. Other states are considering similar programs using Hardest Hit funds.
Multnomah residents who are interested in being considered for the pilot program can go to oregonhomeownerhelp.org for more information.