Congress To Fund Katrina Homeowner,Lender Bailout

Register now

WASHINGTON - (06/09/06) – House and Senate negotiatorsagreed this week on a $94.5-billion emergency spending bill thatwould include $4.2 billion to reimburse New Orleans homeowners andlenders for uninsured property damaged by Hurricane Katrina. Themoney, part of a $9-billion package for uninsured hurricane victimswho did not have flood insurance, would be given to victims under aCommunity Development Block Grant in amounts up $150,000. Under theprogram, the funds, minus insurance settlements and other grants,will go to homeowners whose primary residences were destroyed orseverely damaged, or to relocate out of state. The borrower cansell the home to the state for 60% of its pre-storm value, minusinsurance proceeds and other federal disaster repair funds. If theborrower decides to sell, the lender may be asked to write-off aportion of the debt. To participate in the program, homeowners musthave at least $5,300 of uninsured damages from hurricanes Katrinaor Rita.

For reprint and licensing requests for this article, click here.