HHF Proposal

June 1, 2010
To Whom It May Concern,
Oregon Housing and Community Services (OHCS) is pleased to present the Oregon
Homeownership Stabilization Initiative. Using funds allocated to Oregon from the
Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets and the
wide latitude in program design granted to OHCS by the United States Treasury, we have
constructed a program that will help provide every Oregonian who enters the program an
opportunity to avoid foreclosure. With this funding, the assistance of stakeholders
throughout the state, and the assistance of other economic recovery programs created by
the Obama Administration, OHCS will continue to aid Oregon’s economic revitalization.
Treasury should direct any inquiries regarding this proposal to:
Rick Crager, Deputy Director

Oregon Housing and Community Services
North Mall Office Building
725 Summer Street NE, Suite B
Salem, OR 97301-1266
Rick.Crager@hcs.state.or.us
503-986-2076 - office
503-986-2020 - fax
I hereby certify on behalf of OHCS that we understand and agree to be bound by the
terms of the Proposal Submission Requirements, the associated program requirements,
and confidentiality provisions outlined by U.S. Treasury.
Sincerely,
Victor Merced
Director, Oregon Housing and Community Services
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 6,300 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 five 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. Finally, Loan
Refinancing Assistance is a pilot project designed to allow OHCS to target homeowners
with deeply “underwater” mortgages in two Oregon counties where home values have
declined more than 25 percent.
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.

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.

• 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.
1. Loan Modification Assistance – The Loan Modification Assistance program will

provide resources to assist financially distressed borrowers who are in the process
of modifying their home loans. A one-time contribution of funds will fill a
financial gap that limits a borrower’s eligibility for a loan modification. Funds
may reduce the outstanding principal balance, pay delinquent escrow, arrearages,
or be strategically applied to ensure a positive Net Present Value test. Data
indicates that a high percentage of Oregon’s homeowners who have attempted
modification have failed due to a relatively small resource gap of less than

$10,000. The Loan Modification Assistance program will complement existing
modification options including the Home Affordable Modification Program or
other proprietary modification programs offered by servicers. Eligible applicants
would receive a maximum benefit of $10,000. OHCS anticipates this as a stand-
alone program and staff will work closely with financial entities to identify
eligible borrowers. Homeowners who utilize this program will exit it with an
affordable mortgage payment and a sustainable debt to income ratio.
For a comprehensive overview of the Loan Modification Assistance Program,

please refer to the Loan Modification Assistance Term Sheet. Exhibit 1a.
2. Mortgage Payment Assistance – Mortgage Payment Assistance 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. Unemployed,
underemployed, or those who have experienced a significant loss of income may
qualify. The Mortgage Payment Assistance will pay up to $1,400 per month, with
a total benefit cap of $8,400. Eligibility will be determined by HUD-certified
counselors and staff from the Oregon Homeownership Stabilization Initiative.
Recipients Mortgage Payment Subsidy will work as both a stand-alone program
or as a feeder into either Loan Preservation or Transitional Assistance options.
For a comprehensive overview of this program, please refer to the Mortgage

Payment Subsidy Term Sheet. Exhibit 2a.
3. 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. Exhibit 3a.
4. 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. Exhibit 4a.
5. Loan Refinancing Assistance – Loan Refinancing Assistance is a pilot project

targeted to a population of homeowners in two Oregon counties where home
values have declined by more than 25 percent. Though homes values have
decreased across the state, the primary cause driving the foreclosure crisis in
Oregon is unemployment. Although many homeowners in those two counties
will benefit from the other programs proposed here, the limited resources of the
“Hardest Hit Program” are not adequate to modify deeply underwater loans.
Therefore, the Oregon Homeownership Stabilization Initiative proposes to make
resources available, on a competitive basis, to mission-driven organizations that
will buy the homes or mortgages from lenders at the current market value and
then renegotiate and refinance with the homeowners. These restructured
mortgages will create affordable mortgage payments for owners and help stabilize
the market in two of Oregon’s hardest hit counties. As mortgages are refinanced,
the funds will be revolved and made available for additional support to
homeowners. For a comprehensive overview of this program, please refer to the
Loan Refinancing Assistance Term Sheet. Exhibit 5a.

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.
• 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
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.

January 2010 January 2010 2007-2009 4th Quarter 2009
US Treasury
Hardest Hit
Distressed
Housing 2009 % Loans in # Loans in % Change in 2007-2009 House Price

Housing
Distress 2009 Unemployment 2009 Foreclosure & Foreclosure & Unemployment # Change In Index Change
County Index Population Rate # Unemployed 90+ Delinquent 90+ Delinquent Rate Unemployed from peak
Baker County 0.7 16,450 10% 767 2.4% 26 74.1% 345 -13.1%
Benton County 0.6 86,725 8% 3,348 1.8% 122 87.8% 1,602 -5.6%
HD Clackamas County 1.0 379,845 10% 20,564 5.2% 2,512 121.7% 11,604 -14.1%
Clatsop County 0.8 37,840 9% 1,850 3.6% 186 89.4% 921 -13.1%
HH HD Columbia County 1.1 48,410 13% 3,216 5.6% 363 128.1% 1,864 -14.1%
HH HD Coos County 1.0 63,065 13% 3,639 5.2% 258 93.9% 1,786 -13.1%
HH HD Crook County 1.5 27,185 18% 1,695 9.9% 228 188.7% 1,088 -13.1%
HH HD Curry County 1.0 21,340 13% 1,225 5.6% 88 101.5% 605 -13.1%
HH HD Deschutes County 1.9 170,705 15% 11,853 9.0% 2,121 198.0% 7,805 -36.6%
HH HD Douglas County 1.1 105,395 15% 7,201 5.2% 451 100.0% 3,590 -13.1%
Gilliam County 0.5 1,885 7% 85 -- -- 55.6% 38 -13.1%
HH Grant County 0.8 7,525 13% 461 2.1% 8 67.5% 185 -13.1%
HH HD Harney County 1.0 7,715 16% 560 3.6% 14 120.5% 318 -13.1%
Hood River County 0.7 21,725 8% 1,106 2.6% 63 75.6% 526 -13.1%
HH HD Jackson County 1.4 207,010 13% 12,780 7.0% 1,764 125.0% 7,061 -26.8%
HH HD Jefferson County 1.2 22,715 15% 1,371 8.5% 175 119.4% 744 -13.1%
HH HD Josephine County 1.1 83,665 14% 5,007 7.1% 626 102.9% 2,551 -13.1%
HH HD Klamath County 1.1 66,350 14% 4,289 6.1% 389 100.0% 2,175 -13.1%
HH Lake County 0.7 7,600 13% 457 1.5% 6 73.6% 193 -13.1%
HH Lane County 0.9 347,690 12% 21,761 3.8% 1,521 128.8% 12,366 -12.2%
Lincoln County 0.8 44,700 10% 2,398 3.8% 236 89.1% 1,161 -13.1%
HH HD Linn County 1.0 110,865 14% 7,622 4.8% 644 117.5% 4,239 -13.1%
Malheur County 0.9 31,720 11% 1,403 3.9% 76 92.9% 688 -13.1%
HD Marion County 1.0 318,170 11% 17,099 5.2% 1,733 101.9% 8,925 -13.2%
Morrow County 0.7 12,540 9% 523 1.9% 12 72.2% 233 -13.1%
HD Multnomah County 1.0 724,680 10% 40,536 4.7% 4,615 112.2% 22,079 -14.1%
Polk County 0.8 68,785 9% 3,687 4.4% 379 87.8% 1,799 -13.2%
Sherman County 0.6 1,830 9% 93 -- -- 77.6% 47 -13.1%
Tillamook County 0.8 26,130 9% 1,198 3.4% 133 89.8% 587 -13.1%
Umatilla County 0.7 72,430 10% 3,688 3.3% 189 63.8% 1,566 -13.1%
Union County 0.9 25,470 11% 1,422 2.8% 56 105.5% 749 -13.1%
HH Wallowa County 0.9 7,100 12% 440 3.0% 17 96.7% 219 -13.1%
Wasco County 0.8 24,230 9% 1,242 3.4% 76 79.6% 592 -13.1%
Washington County 0.9 527,140 9% 26,884 4.3% 2,955 116.3% 14,664 -14.1%
Wheeler County 0.6 1,585 9% 57 -- -- 57.1% 23 -13.1%
HD Yamhill County 1.1 95,250 11% 5,509 5.8% 611 128.0% 3,183 -14.1%

3.5 14
Oregon Foreclosure and Unemployment by Quarter

1980-2009 Foreclosure Rate
(by quarter)
Unemployment Rate
3.0 (seasonally adjusted, first month of quarter) 12
2.5 10
Unemployment Rate
2.0 8
Foreclosure Rate
1.5 6
1.0 4
0.5 2
0.0 0
1980 2009

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, & 6/1/10-8/1/10
Project Manager
Develop Position Description for Program OHCS Director, Deputy & 6/1/10 - 6/8/10
Administrator Project Manager
Develop Position Description for Core OHCS Director, Deputy, HR 6/1/10 - 6/15/10
Administrative Team: Human Resources, Manager, Policy &
Senior Accountant, IT Coordinator, Outreach Communication Mgr, CFO,
Contractor, Business Process Coordinator, and CIO
and Researcher
Hire Program Administrator OHCS Director, Deputy 6/1/10-7/1/10
Identify staffing location and procure office OHCS Facility 7/1/10-9/30/10
needs Manager/Program
Administrator
Hire core administrative team Various 7/1/10-7/15/10

Develop sub-allocations and methodology of Program Administrator & 7/1/10-8/31/10
program service delivery Researcher
Complete business mapping of all programs Program Administrator and 30 days from
and processes Business Process proposal
Coordinator approval
Implement Outreach Plan Outreach Contractor Upon
completion of
business
mapping
Develop and Implement Contracts with HUD Program Administrator 45 days from
Certified Counselors proposal
approval
Develop and release Request for Proposals Program Administrator 45 days from
for Refinancing pilot project proposal
approval
Complete recruitment for Program Program Administrator 75 days from
Specialists proposal
approval
Complete IT procurement Program Administrator/IT 75 days from
Coordinator proposal
approval
Complete Training of HUD Certified Training Contractor 75 days from
Foreclosure Counselors proposal
approval
Staff Training Core Administrative Staff 90 days from
proposal
approval
Test program with pilot locations Program Specialist 105 days from
proposal
approval
Full implementation of all programs Program Specialist 120 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
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
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, three of the programs OHCS proposes, Loan Modification Assistance, Loan
Preservation Assistance, and Loan Refinancing 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 tax-
exempt 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.
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
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
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.
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
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 Responsible for operation and oversight of the Oregon 1 full time
Administrator Homeownership Stabilization Initiative. Oversees for 1 year
marketing of program, establishes business contacts, and
hires lead workers.
Intake Staff a call center, receive program inquiries and 2 full time
Personnel provide information and referral to borrowers, general for 1.5
public, business partners. years
Senior Develops initial mapping of fiscal process. Works in 1 full-time
Accountant conjunction with Senior Program Manager to establish for 3 years
fiscal and program processes and guidelines. Trains
other accounting staff and oversees work, completes
final accounting at program closing.

Accounting Account for program funds including processing 1 full-time
Staff payments and program reporting, for 2 years
2 half-time
for 2 years
Human Assists with hiring staff. 1 full-time
Resource for 1 year
Analyst
Information Provides support and maintenance for program systems 1 full-time
Technology for 2 years
Staff
Senior Develops monitoring process, trains additional monitors, Full-time
Compliance and conducts monitoring of activities and business for 3 years
Monitor partners to ensure compliance with federal regulations
and program rules.
Compliance Conduct monitoring of activities and business partners 2 full-time
Monitors to ensure compliance with federal regulations and for 2 years
program rules.
Research Continual research and monitoring of foreclosure, 1 half-time
Analyst unemployment and delinquency rates for allocation for 2 years
plan, gathers data for reporting.
Program Maps the initial business process for each program. 1 full-time
Manager Works in conjunction with Senior Accountant to for 3 years
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.
Senior Loan Supervises all program activities. Works with Program 1 full time
Specialist Manager on development of program guidelines and for 3 years
processes. Develops program forms and documents.
Trains other loan specialists and oversees work.
Loan Specialists Process applications for loan modifications, mortgage 3 full-time
assistance, and loan preservation assistance. Take for 3 years
requests, review for eligibility, recommend 11 full-
approvals/denials, complete loan documents, process time for
funding requests, collect data for reporting, and close one year
out files.
Administrative Provide program and clerical support. Data 1 full-time
Specialists management. for 3 years
1 half-time
for 1 year
Program Oversees Transitional Assistance Program. Takes 1 full-time
Manager requests, reviews for eligibility, recommends for for 2.5
funding, completes grant documents, processes funding years
requests, collects data for reporting, and closes out files.

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
Hardest Hit Initiative Total $ 1,297,654
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 $ 7,000,000

OREGON HOUSING AND COMMUNITY SERVICES
State Housing Council
Director
Community Action
Programs of Oregon Entity set up to
Receive Hardest Hit Funds
Deputy Director
Contract with OHCS
Asset and Property Oregon Homeownership

Financial Management Community Services Housing Information Services
Management Stabilization Program
Division Division Division Division
Division Contract
Overall Contract
Administrator
Program Manager Outreach Call Center Financial Services
Mortgage Modification Mortgage Assistance Transitional Assistance Revolving Loan Program

Exhibit 1a
Loan Modification Assistance
Summary Guidelines
Program The Loan Modification Assistance program will provide

Overview resources to assist financially distressed borrowers who are in
the process of modifying their home loans.
A one time contribution of funds will be used to fill a financial

gap that limits a borrower’s eligibility for a loan modification.
Funds can 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. The
Loan Modification Assistance program is intended as a
complement to existing modification options. Eligible
applicants would receive a maximum benefit of $10,000
payable to a financial entity.
Program Goals Loan Modification Assistance is meant to provide a quick

infusion of resources that will allow for a successful loan
modification. Without these additional resources,
homeowners would be ineligible for modification. After
modification, recipients are required to have a loan to value of
no more than 100 percent, a total debt-to-income of up to or
less than 50 percent, and a mortgage payment of no more than
31 percent including principal, interest, taxes, insurance.
Target Populations Eligibility will be determined solely by need and program

qualification.
Program Allocation $26 million – 29.5 %
Borrower Eligibility • Current household income equal to or less than 120 %

Criteria state median income.
• Have either been denied for, or are in the process of
receiving, a loan modification
• Loan must have been originated before January 1,
2009.
• Recipients must show capability to maintain mortgage
after modification or loan preservation assistance.

Property/Loan • Properties receiving resources must be owner
Eligibility Criteria occupied.
• Must be a single family home.
Program Exclusions • Owners of second homes or investment properties.

• Those with liquid resources sufficient to pay their
mortgage.
Program This program is envisioned as a grant program to financial

Repayment/Use of institutions to speed and incent the completion of failed or
Repaid Funds stalled loan modifications.
Maximum/Median Maximum is $10,000.

Individual Program
Amount
Program One time payment on behalf of borrower to financial

Duration/Extension institutions.
Estimated Currently, OHCS anticipates aiding a minimum of 2,600

number/Maximum homeowners.
Participating
Households
Program OHCS intends for this program to be fully operational upon

Inception/Duration receipt of funds from U.S. Treasury. Pending speedy
resolutions of modifications, the program should stay
operational for no more than one year.
Program This program will only function in concert with existing loan
Leverage/Interactions modification programs.
with Other Programs
Program Leverage To the extent available, this funding stream should be matched
with Other Financial by financial institutions. It is OHCS’s expectation that
Resources resources will be matched only when advantageous to the
borrower.

Program Interaction This program is designed to work directly with HAMP. In
with HAMP cases during which otherwise eligible HAMP applicants fail
modification due to a gap in financial resources of $10,000 or
less, this program funding would serve to bridge that gap.
Though it is not required that it work only with HAMP, using
this funding stream to help streamline and encourage more
HAMP modifications is a hoped for outcome.
Program Success 2,600 successful modifications.

Metrics
After one year, 80 percent of benefit recipients remain in their
homes.
Data Collection and OHCS staff requests that U.S. Treasury develops reporting
Reporting guidance or facilitates a work group with the other Hardest Hit
States to ensure a broad level of consistency among data and
reporting.
Books and Records Accurate, current and complete financial and other records that
identify and support the HHF activities will be maintained for
three years from the date of the submission of the final report.
Original records documenting recipient eligibility and election
of program will be maintained by HUD Approved Counselors
and Loan Servicers and must be made available for
audit. Accounting records including documentation supporting
draws and disbursements will be retained on behalf of the
Hardest Hit Initiative by OHCS.

Exhibit 1b
Modification Assistance
Oregon Homeownership
Funds from Treasury
Stabilization Initiative
OHCS
Modification
Proposed Modification Assistance
Modification Review,
Borrowers working directly Approval,
with Financial Entities Fund Distribution
($10,000 max)
Financial Entities
Borrowers working with

Foreclosure Counselors
Modified Loans for

Borrowers
Target: 2,600 served

Exhibit 2a
Mortgage Payment Subsidy
Summary Guidelines
Program Mortgage Payment Subsidy will provide up to six months of

Overview mortgage payment assistance with a required 1:1 match from
the investor for a total anticipated benefit of 12 months of
assistance. This temporary assistance will be provided to
unemployed, substantially underemployed, or acutely
financially distressed homeowners. The Mortgage Payment
Subsidy will pay up to $1,400 per month with a total benefit
cap of $8,400.
The state’s foreclosure counseling network would serve as the

administrative entry point for initial eligibility screening.
Mortgage Payment Subsidy will work as both a stand alone
program or as a feeder into Loan Preservation Assistance or
Transitional Assistance.
Program Goals Mortgage Payment Subsidy is intended to provide the

unemployed and financially distressed the opportunity to stay
in their homes while they search for employment.

qualification.
Program Allocation $16 million – 18 %
Borrower Eligibility • Unemployed, underemployed, and or significant and

Criteria verifiable loss of income.
• Household income equal to or less than 120 % state
median income.
• A reasonable expectation that the recipient would be
able to qualify for a modification in the future should
they become reemployed.
2009.


mortgage.
Program This program is envisioned as a revolving fund. Money will

Repayment/Use of be allocated to borrower as a soft second loan. Should the
Repaid Funds borrower sell the property at a profit, OHCS would expect
borrowers to repay funds.
Maximum/Median Maximum recipient eligibility is $8,400.

Individual Program
Amount
Program Recipient will receive $8,400 of assistance, capped at $1,400

Duration/Extension per month, from the Oregon Homeownership Stabilization
Initiative matched by financial institutions by at least a 1:1
ratio.

Participating
Households
Program OHCS intends for this program to be fully operational upon

Inception/Duration receipt of funds from U.S. Treasury. Given current
unemployment trends and recent economic forecasts we
expect to exhaust the funds within 15 months.
Program The Mortgage Payment Assistance Program should lead

Leverage/Interactions recipients directly into Loan Preservation Assistance,
with Other Programs Transitional Assistance, or another existing loan modification
program.

Program Leverage OHCS expects financial institutions to match mortgage
with Other Financial payment subsidy resources by at least a 1:1 ratio. In all
Resources likelihood, that match will occur through a lender forbearance.
Program Interaction Under certain circumstances, program recipients will move

with HAMP directly into HAMP, or other modification programs.
Program Success Program serves 2,000 homeowners

Metrics
1:1 match from financial institutions
At the end of one year, 90 percent of program recipients have

avoided foreclosure.
Data Collection and OHCS staff request that U.S. Treasury develop reporting
Reporting guidance or facilitate a work group with the other Hardest Hit
reporting.

Exhibit 2b
Mortgage Payment Assistance
Funds from Treasury
$8,400 maximum
Existing Borrowers working
with Foreclosure Counselors OHCS
Foreclosure Mortgage Payment Program will work together
Counselors Assistance with Financial Entity
Target: 2,000 Served forbearance programs
Up to 12 months
of assistance
New Borrowers working with
Financial Entities
Yes No
Loan Preservation Ready for
Transitional Assistance
Assistance Modification?

Financial Entities
Ready to resume
original payments
Original Mortgage
Continued

Exhibit 3a
Loan Preservation Assistance
Summary Guidelines
Program Loan Preservation Assistance is intended to benefit those

Overview homeowners who recover from unemployment or financial
distress to ensure their loans become, or remain, affordable.
Resources provided through this program can be used to
ensure successful modification, pay arrearages, delinquent
escrow, or other fees incurred during a period of
unemployment or financial distress. Eligibility will be
determined by Foreclosure Counselors and staff from the
Oregon Homeownership Stabilization Initiative. Recipients
may receive up to $20,000.
Program Goals Loan Preservation Assistance is intended to provide those who

recover from unemployment or financial distress the
opportunity to pay any significant penalties they have
incurred, qualify for modification, or pay arrearages.

qualification.
Borrower Eligibility • Recently unemployed, underemployed, and or

Criteria significant and verifiable loss of income.
median income.
• After anticipated assistance, recipients cannot have
debt to income ratio above 50 percent.
2009.
• After modification, must have a Loan to Value ratio of
125 percent.


mortgage.
Program This program is envisioned as a revolving fund. Money will

Repayment/Use of be allocated to a borrower as a soft second loan. Should the
Repaid Funds borrower sell the property for a profit, OHCS would expect
repayment of funds.

Individual Program
Amount
Program Financial institutions will receive one time payments on behalf

Duration/Extension of borrower.

Participating
Households
Program OHCS intends for this program to be partially operational

Inception/Duration upon receipt of funds from U.S. Treasury. However,
expectations are that it will not begin significant operations
until year two of the Oregon Homeownership Stabilization
Initiative as recipients of Mortgage Payment Assistance exit
that program and into this one.
Program OHCS expects that recipients of these resources will enter into
Leverage/Interactions companion loan modification programs such as HAMP.
with Other Programs

Program Leverage OHCS expects financial institutions to match these resources
with Other Financial by at least a 1:1 ratio.
Resources
Program Interaction Mortgage Preservation Assistance would incent recipients to

with HAMP enter loan modification programs such as HAMP. However,
doing so is not required.
Program Success 1000 successful, permanent modifications.

Metrics
80% of funding recipients remain in their homes after one
year.
Achieve a minimum 1:1 match from financial entities.
reporting.

Exhibit 3b
Loan Preservation Assistance
Oregon Hom eownership

Funds from Treasury
OHCS
Loan Preservation
Proposed Modification Assistance
Modification Review,
Approval,
Fund Distribution
($20,000 m ax)
Borrowers working directly
Financial Entities
with Financial Entities
with Foreclosure Counselors

Modified Loans for
Borrowers
Target: 1,000 served
Borrowers receiving some
OHCS Mortgage Paym ent
Assistance that
subsequently are ready for
m ortgage m odifications

Exhibit 4a
Summary Guidelines
Program Transitional Assistance will be for those homeowners for

Overview whom foreclosure would otherwise be inevitable. This
program will serve as an alternative exit point for recipients of
Mortgage Payment Subsidy 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.
Funds would be available on a one-time only basis for up to
$3,000.
Program Goals Transitional Assistance Program is intended to give resources

to financial distressed homeowners so they may be able to find
affordable housing. Additionally, the resources will serve as
an incentive to maintain the home prior to turning it back over
to a financial institution.

qualification.
Borrower Eligibility • Recently unemployed, underemployed, and or

Criteria significant and verifiable loss of income.

median income.

Program This is a one time, grant program. Funds will not be repaid,
Repayment/Use of nor revolve.
Repaid Funds

Individual Program
Amount
Program Recipients will receive a single payment.

Duration/Extension

Participating
Households
Program OHCS intends for this program to be partially operational

Inception/Duration upon receipt of funds from U.S. Treasury. However,
expectations are that it will not begin significant operations
until year two of the Oregon Homeownership Stabilization
Initiative.
Program OHCS anticipates that this program will interact with other
Leverage/Interactions lender based programs that provide resources to homeowners
with Other Programs who can no longer maintain their mortgages.
Program Leverage OHCS expects financial institutions to match these resources

with Other Financial by at least a 1:1 ratio.
Resources

Program Interaction N/A
with HAMP
Program Success At least a 1:1 match by financial entities

Metrics
1,300 foreclosures prevented
reporting.

Exhibit 4b
Funds from Treasury

Foreclosure Counselors Transitional Assistance $3,000 maximum
Recommendation Target: 1,300 Served

Mortgage Assistance
provided and
subsequently needed
Financial Entities
Transition Assistance
provided via
Counseling Organizations

Financial Entities

Exhibit 5a
Loan Refinancing Assistance
Summary Guidelines
Program Loan Refinancing Assistance is a pilot project targeted to a

Overview population of homeowners in two Oregon counties that have
experienced home value declines of more than 25 percent.
The Oregon Homeownership Stabilization Initiative will

partner with a mission based organization that will buy the
homes from lenders and renegotiate and refinance with the
homeowner. These restructured mortgages will create
affordable mortgage payments to the owner and help stabilize
the market in two of Oregon’s hardest hit counties.
Program Goals Home values have declined so steeply in two Oregon Counties
that only investments much larger than the ones proposed by
the other programs contained in this proposal would provide
benefits. This program would allow deeply underwater
homeowners the opportunity to avoid foreclosure and gain
mortgage affordability.

qualification.
Borrower Eligibility • Household income equal to or less than 120 % state

Criteria median income.
2009.
• Other available Oregon Homeownership Stabilization
Initiative programs are insufficient.
• Other existing loan modification programs are
insufficient.
• After modification, must have a Loan to Value ratio of
100 percent.


mortgage.
Program Funding will revolve over time. Underwater loans would be

Repayment/Use of purchased at steep discounts from financial entities.
Repaid Funds Homeowners would refinance their homes based on current
value, and then Oregon Homeownership Stabilization
Initiative’s partner organization would recover proceeds from
refinance. Money would then revolve back into the pool and
another home would be purchased.
Maximum/Median Maximum eligibility will be determined in consultation with

Individual Program partner organization during the RFP process.
Amount
Program Current projections indicate that the initial funding would be

Duration/Extension spent within two years.
Estimated Currently, OHCS anticipates aiding a minimum of 330

Participating
Households
Program OHCS intends to publish a Request for Proposals upon final

Inception/Duration approval Hardest Hit Fund proposal approval. The program is
expected to be fully operational within six months of receiving
Hardest Hit funding.
Program It is unlikely that this program will interact with other

Leverage/Interactions mortgage modification programs. The loans Mortgage
with Other Programs Refinancing Assistance will impact are so deeply underwater
that the likelihood of them qualifying for assistance from other
programs is low.

Program Leverage There will be no direct interaction with other Oregon
with Other Financial Homeownership Stabilization Initiative programs, but OHCS’s
Resources partner organization may leverage private investments to
further enhance its purchasing power while searching for
deeply underwater loans.
Program Interaction N/A

with HAMP
Program Success 330 homeowners assisted.

Metrics
90 percent remain in their homes after one year.
Data Collection and OHCS staff requests that U.S. Treasury develops reporting
Reporting guidance or facilitates a work group with the other Hardest Hit
reporting.

Exhibit 5b
Loan Refinancing Assistance
Funds from Treasury

Foreclosure Counselors Loan Refinancing Assistance
Target: 330 Served
Refinancing
New Borrowers working with returns funds
Foreclosure Counselors to the program
Financial Entities Investment Broker
Borrowers working with New Mortgage for Borrower

Financial Entities via New Lender

HHF Proposal

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HHF Proposal

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June 1, 2010

To Whom It May Concern,

Treasury should direct any inquiries regarding this proposal to:

Rick Crager, Deputy Director

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

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

Oregon Homeownership Stabilization Initiative 2

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

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

Establishment of an Eligible Entity

Oregon Homeownership Stabilization Initiative 3

A. General Overview of the Program

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

• Complement existing loan modification and foreclosure prevention programs.

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

• Relieve acute economic distress for homeowners.

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

• Deliver resources quickly.

1. Loan Modification Assistance – The Loan Modification Assistance program will

Oregon Homeownership Stabilization Initiative 5

For a comprehensive overview of the Loan Modification Assistance Program,

2. Mortgage Payment Assistance – Mortgage Payment Assistance will provide up

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

3. Loan Preservation Assistance – Loan Preservation Assistance will benefit those

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

4. Transitional Assistance – Transitional Assistance will be offered to those

Oregon Homeownership Stabilization Initiative 6

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

5. Loan Refinancing Assistance – Loan Refinancing Assistance is a pilot project

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

• Only single-family homes are eligible.

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

• Recipients must show capability to maintain mortgage after modification

• 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

• Owners of second homes or investment properties.

• Those who voluntarily left their jobs.

• Those with liquid resources sufficient to pay their mortgage.

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

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B. Population Served and Allocation Methodology

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Housing 2009 % Loans in # Loans in % Change in 2007-2009 House Price

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Oregon Foreclosure and Unemployment by Quarter

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Timeline for Implementation

Prior to implementation, OHCS must develop processes, install administrative

However, the programs contained within the Oregon Homeownership Stabilization

Oregon Homeownership Stabilization Initiative

Task Responsibility Date

Oregon Homeownership Stabilization Initiative 13

To ensure that the Oregon Homeownership Stabilization Initiative succeeds, homeowners

Oregon Homeownership Stabilization Initiative 14

Additionally, though the Oregon Homeownership Stabilization Initiative will help

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

Oregon Homeownership Stabilization Initiative 15

Loans Financed With Tax-Exempt Bonds

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

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C. Demonstrated Capacity to Implement