Federal dollars flow into region, but offer little help to those who are losing their homes

By Mara Stine

The Gresham Outlook, Mar 31, 2009, Updated Oct 30, 2009

Gresham foreclosures from October 2008 to January 2009.

Steven Brown / The Outlook

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A foreclosed home is a tragedy for displaced homeowners, and in some case renters, but they also can have ripple effects on the neighborhood.

Lower sale prices for surrounding homes. General unsightliness from unkept yards. Crime, such as theft of appliances and fixtures, when nobody calls a house home.

It’s those kinds of issues Gresham officials hope to avoid with $645,000 in federal funds for a Neighborhood Stabilization Program awarded as part of President George W. Bush’s Economic Recovery Act of 2008, which he signed into law in October.

“It doesn’t help prevent homes from foreclosing,” said Gresham City Planner Michael Parkhurst of the money.

Instead, the federal dollars from the Housing and Urban Development Department are being spent across the country to help minimize the blight and negative affects of foreclosed properties on surrounding communities. Portland and Multnomah County also received funding.

In February, Congress approved another $2 billion in Neighborhood Stabilization Program funds as part of President Barack Obama’s federal economic stimulus package, of which another $2 million is expected for Oregon. But cities will have to compete for those dollars.

Compared to communities across the nation hardest hit by foreclosure, Gresham could be doing a lot worse.

In Nevada, Arizona, California and Florida — which had the most foreclosure filings in February — there are developments in which 90 percent of the houses have been foreclosed. Shanty towns or tent cities for the homeless are popping up in cities such as Fresno and Sacramento, serving as a modern-day equivalent of the Great Depression’s Hoovervilles.

Oregon, Illinois and Idaho recently joined the ranks of the top-10 states with the most foreclosure activity, according to RealtyTrac, a California-based real estate data firm.

Gresham foreclosures rates surpass Portland

“Here it’s spotty,” said Mike Abbaté, Gresham’s director of planning services. “There’s no large scale, huge concentration of foreclosed properties. But that being said, we do have more foreclosures per capita than Portland.”

According to RealtyTrac, in January, Gresham saw a high of 115 foreclosures — including auctions, bank repossessions and pre-foreclosure activity, such as when a homeowner is notified that the home will be auctioned off. That’s 27 percent higher than Portland’s 84 and 64 percent more than Troutdale’s 41.

As for homes that have formally been foreclosed — or the bank has repossessed it and the residents have moved — Gresham’s number reached 63 between October 2008 and March 9, 2009.

However, between just October and late January, there were about 600 properties in default, or more than 30 days behind on their mortgage payments, in East Multnomah County, or roughly east of Interstate 205.

About half the census block groups in Gresham qualify for the Neighborhood Stabilization Program funds. And Gresham’s target areas for spending those dollars include parts of Fairview, Wood Village and Troutdale.

Parkhurst said foreclosure rates started to climb in Gresham and the smaller East County cities last September. He suspects the jump is due to rising unemployment rates, which topped 10 percent in Oregon during February, in addition to adjustable-rate mortgages resetting, resulting in higher monthly mortgage costs.

“The first wave (of foreclosures) hit this winter, and I think the economy has gotten worse since then,” Parkhurst said. “Really, it’s the job losses that are scary, because it doesn’t matter what your interest rates are if you don’t have an income.”

A map of local foreclosures shows no community is immune. Homes are foreclosing in East County’s more affluent communities, such as Persimmon, Fairview Village and Blue Lake.

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