By Bill MacKenzie

 If we want people to be at work instead of on welfare, small initiatives can make a big difference.

Emelia Moreno knows that.

When a used truck she owned was totaled in an accident, the insurance payment didn’t cover the full amount of the loan still due, leaving her owing $6,000. So when she bought a used Saturn to replace the truck, she added the $6,000 to a new $11,000 loan. That created a burdensome $17,000 loan from AmeriCredit, a General Motors subsidiary that offers auto loans to financially challenged “sub-prime customers.”

To make things worse, the loan had a punishing interest rate of about 35 percent, translating into initial monthly payments of $390 … which rose to $426.98 when she missed some payments.

Emelia Moreno (not her real name) is a single mother who grew up in south central Los Angeles and now works for a social services agency in Hillsboro. In the beginning, she figured she could handle the monthly payments on her car, but eventually they overwhelmed her.

“I couldn’t refinance because I owed more than the car was worth,” she said. “I was juggling my bills. Then I learned my employer planned to cut my work hours from 40 a week to 32.”

Compounding her troubles, she was caring for a daughter born with heart problem who required continuing medical care involving specialists and an extensive regimen of drugs.

“I got to a point where I just couldn’t make it, where I wanted to say, ‘OK, take my car. I just can’t make the payment anymore,’” Moreno said.

That was when a co-worker told Moreno about the “Ways to Work” program under the umbrella of Portland-based nonprofit called Metropolitan Family Service. The program helps low- and moderate-income individuals buy, refinance or repair cars with loans at reasonable rates.

According to the Urban Institute, families without cars often find it difficult to find a good job, get to work and stay in the work force — particularly in spread out suburbs. People without vehicles also have problems meeting their family’s needs, such as getting to and from medical appointments and childcare facilities and dealing with emergencies. Transportation difficulties may also limit where people look for or consider working.

It is to Hillsboro’s economic advantage, therefore, that residents have access to cars.

Moreno took her first step toward car contentment by scheduling a meeting with Abby Wood, Ways to Work’s program coordinator. Wood told Moreno to bring her current $9,000 loan balance down to $8,000 (all Ways to Work would refinance) and to draw up a budget.

When Moreno finally whittled down her existing loan, Ways to Work offered to refinance her car with an $8,000 loan at 8 percent, repayable at $150 a month.

So far, Moreno is another success story for Ways to Work.

In other situations, such as when clients seek a loan to buy a used car, Ways to Work teaches them how to do it.

“The financial part is important, but learning how to buy a used vehicle is a really important thing to learn,” said Wood. “A lot of people who come to our program have no idea that they have a choice of what car to buy; that they have the option of taking the car to be checked out before they purchase it; that they can research a car before they purchase it; that Consumer Reports could tell them this car is better than that car. It’s a really empowering thing.”

The Ways to Work program offers loans of up to $8,000 at 8 percent interest. The result is more than $1 million in loans to community members in Oregon and southwest Washington since the program began in 2004; a low payment delinquency rate of less than 10 percent; and a default rate of less than 4 percent.

“Ways to Work is not a handout,” Wood said. “It’s helping Emelia make sure she can keep her job, stay off public assistance and get her daughter where she needs to go.”

“It’s been a blessing,” Moreno said. “To me, it’s been a lifesaver.”

Bill MacKenzie is a former congressional staff member, newspaper reporter and communications manager for a Hillsboro company.

Originally published in the Hillsboro Tribune,  Oct 4, 2013