The city of Portland is backing off a letter it sent to people who lost their homes in the Terwilliger landslide. That letter told homeowners to clean up the mess within a few weeks or pay a steep fine. Commissioner Sam Adams now says the city will retract that letter. He says when Commissioner Randy Leonard saw it, he decided to work on what he calls "a more compassionate response".

Last week, a home on SW Burlingame Place slid 300 feet down a SW Portland hillside, crashing into the home below. Miraculously, no one was injured but several other homes were damaged and seven homes had to be evacuated.

Displaced homeowners then received a notice from the city saying those affected are responsible for hiring demolition workers and geo-tech engineers to clear debris and stabilize the slope.

 Slideshow: Ground scene | Sky 8 photos | Aftermath damage

The notice included this announcement:

“This structure may not be occupied until all repairs are made and a certificate of completion has been obtained from the Bureau of Development Services. Failure to follow this rule will result in a $1,000 penalty and possible vacation of the property.”

“How are we going to do this?” asked David York, one of those displaced. “We don’t know if our house is being covered, we're homeless, we're trying to get by from one day to the next and then we get a letter that says, 'Oh, by the way, you have to get the debris in two weeks.' That was shocking and upsetting.”

It's the latest in a series of shocks for residents of the neighborhood. York says he was also told by his insurance company that he's probably not covered.

It's hard to tell which is worse for residents, the financial loss or the loss of houses that were also homes.

Shattered Homes, Shattered Dreams

Chris Korsgaard and York lived in one of the homes demolished by last week’s landslide on Southwest Terwilliger Boulevard.

But they'll never cook breakfast in their kitchen again. That’s because another house now sits in shambles on their roof, and in their back yard.

“Our beautiful new deck,” Korsgaard said as he pointed outside. “And now we look out here and there’s nothing but house debris and a few branches.”

Tucked in the debris, were floor tiles, a toilet, even a crushed car. But downstairs was worse.

York said the first time he went downstairs, the sight took his breath away. A giant Douglas Fir broke through the basement, tearing apart the load bearing beams that hold the house together.

“Thats when I started to really grieve that were not going to be able to live here like this again,” York said.

York said the house is a total loss.

Two doors down, on the other side of the slide, Shan Hemphill’s home is unharmed. But from his back porch, he looks out on the landslide.

“Personally I’m exhausted,” Hemphill said. “I want to get my house back, I want this cleaned up.”

City officials said they’re doing everything in their power to help homeowners clean up the mess. They said they don’t think any homeowners on the hill will have to pay a fine. But many people who lived near the slide say it’s overwhelming.

Korsgaard said he just wants a place to call home again.

"I'm stunned, it hurts, I cry at night,” he said. “I can weather something like this for a day or 2 if I have a home to go home to and curl up in my bed and say its all over now, but its not all over now, because this is my home."

Some homeowners said they believe that their insurance companies will cover them. But they won’t know until later this week.