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0 of 3 Premium Clicks used this month SUBSCRIBE Print + Online Subscriber Activation | Register x Forgot Password | Need an Account? e-edition | subscribe | newsletter | deals Classifieds Jobs Autos Real Estate FEATURED » NEWS NOW Our View: Dropped golf course a loss for the south coast ... Trading coho for chinook ... UPDATED: Ten dead in UCC shooting ... Our View: Dropped golf course a loss for the south coast ... Trading coho for chinook ... UPDATED: Ten dead in UCC shooting ... HOUSING Jackson County debt-ridden homeowners have an option Program provides a reset on underwater mortgages Comment By Greg Stiles Mail Tribune MailTribune.com By Greg Stiles Mail Tribune Posted Apr. 27, 2015 at 3:50 PM Updated Apr 27, 2015 at 4:32 PM By Greg Stiles Mail Tribune Posted Apr. 27, 2015 at 3:50 PM Updated Apr 27, 2015 at 4:32 PM » Social News Jackson County single-family residence values have recovered substantially since plunging when the real estate bubble burst. Nonetheless, Zillow Real Estate Research reports that as many as 19 percent of local homeowners remained underwater — owing more than their house's value — at the end of 2014. In some quarters that will mean treading water for a while longer, waiting for property values to climb. In other cases homeowners may not have that option. For that group, Oregon's Loan Refinancing Assistance Pilot Project, which is supported by federal funding, may be an option. Homeowners who have suffered hardships that caused them to fall behind in mortgage payments qualify for a state program that began three years ago in Jackson and Deschutes counties, but has since expanded into Josephine, Crook and Jefferson counties. The revolving fund program, with a $12 million allocation, is overseen by the state Housing and Community Services agency. The program has so far helped 171 homeowners stay in their houses, including 75 in Jackson County. The initial money for the program came through the Federal Hardest Hit Fund. A third-party administrator works with real estate agents to arrange a short sale. The home is then simultaneously sold back to the family with a new 30-year mortgage, effectively making it a home refinance with a substantial principal reduction. "You don't see too many government programs that are self-supporting like this one, said Erik Sten, president of Further Development, a Bend mortgage firm, who administers the funds. Existing lenders receive 88 percent — more than they might otherwise expect — of the amount owed, he said. The 12 percent difference pays for the administrative and closing costs. At the end of March, the average principal reduction was $100,000, with monthly payments reduced an average of $450. So far, about $20 million has been cycled through the program. Existing mortgages must be less than $500,000 and involve a hardship — such as health, divorce or job loss — resulting in diminished income. "There has to be some reason they can't repay the mortgage," said Kimi Fernandez of RE/Max Ideal Brokers in Medford. "The homeowners are basically in a position to where no one will touch it, because it wouldn't appraise out. Right now, we're looking for as many people as we can find, and can qualify." Homeowners must also show they can make the monthly payments on a 6 percent, 30-year mortgage. "After two years they could probably refinance to a lower interest rate, if they are keeping up with all their bills," Fernandez said. Homeowners will receive a 1099-C form, with the C standing for cancellation of a forgiven debt. The law making forgiven short sale debt non-taxable ended Dec. 31, 2014, Sten said. However, the rule may be reinstated at some point. "We always tell our clients they should talk to an accountant about the tax implications," he said. The program is authorized through 2017, although applications will likely be cut off at the end of 2016, Sten said. Application information can be found at http://www.oregonhomeownerhelp.org/en/homeowner-education-program/lrapp-program Reach reporter Greg Stiles at 541-776-4463 or [email protected] . Follow him on Twitter at www.twitter.com/GregMTBusiness , on Facebook at https://www.facebook.com/greg.stiles.31 , and read his blog at www.mailtribune.com/ Economic Edge . By Greg Stiles Mail Tribune MailTribune.com By Greg Stiles Mail Tribune Posted Apr. 27, 2015 at 3:50 PM Updated Apr 27, 2015 at 4:32 PM » Comment or view comments Reader Reaction » STAY INFORMED Email NewsLetter Sign Up Today Sign up for our newsletter and have the top headlines from your community delivered right to your inbox. Southern Oregon Directory Featured Businesses Loading... 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