A state effort to shift federal mortgage aid to more populous counties to the north at the expense of economically ravaged counties in Southern Oregon is out of line, the Jackson County Board of Commissioners decided today.

A state effort to shift federal mortgage aid to more populous counties to the north at the expense of economically ravaged counties in Southern Oregon is out of line, the Jackson County Board of Commissioners decided today.

Commissioners approved a letter drafted by Commissioner C.W. Smith denouncing a change made by the Oregon Housing and Community Services to expand the program from 16 to 20 counties and dilute the amount given to the more rural counties.

"We feel it is wrongly taking the money from the counties who need it to the counties who don't need it," Commissioner Dave Gilmour said.

The federal program will provide $88 million for Oregon counties that have high unemployment and high foreclosure rates. Homeowners who have had sharp declines in income and are struggling to pay mortgages would benefit from the program.

Both commissioners Smith and Gilmour voted to approve sending in the protest letter. Commissioner Jack Walker is on vacation.

Smith and Gilmour said they suspect political maneuvering on the part of the state to include Multnomah County as one of the counties that would benefit, even though it didn't hit the federally required 12 percent unemployment rate target in 2009.

The money coming to Oregon is an extension of the "Hardest Hit Fund" announced by President Obama earlier this year. The first round of funding targeted five states in which home prices had declined more than 20 percent. This second round includes five states — Oregon, North Carolina, Ohio, Rhode Island and South Carolina — that had numerous counties in which the unemployment rate topped 12 percent in 2009. Jackson County had a 13 percent unemployment rate while Josephine County hit 14 percent.

Oregon Housing and Community Services officials have proposed giving Deschutes and Jackson counties, two of the three counties hardest hit by the economic downturn, $10 million to share to address a large number of homes where home values are less than loan amounts.

Rick Crager, deputy director of Oregon Housing and Community Services, said no political maneuvering was involved in the decision to place Multnomah County on the list. He said foreclosure rates alone don't adequately address whether a county is distressed and so the state added other factors to the calculation.

Based on the criteria his department established, Deschutes County was rated the most economically distressed, followed by Crook and Jackson counties. Jefferson, Josephine, Klamath, Yamhill, Columbia and Douglas counties also were high on the list, Crager said.

— Damian Mann