New Flood Insurance SchemeEmerges

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WASHINGTON - (11/17/05) -- While they struggle to providefunding for an estimated 216,000 homes covered by the NationalFlood Insurance Program, lawmakers are still unsure about a muchlarger problem rendered by Hurricane Katrina--as many as 300,000more properties that were not insured for flood damage. A proposalfloated by Mississippi's congressional delegation to allow thoseuninsured homeowners to buy coverage through the NFIP retroactivelyappears to be dead because lawmakers don't want to set theprecedent of allowing retroactive coverage. Mississippi Sen. ThadCochran floated a new proposal this week to expand the CommunityDevelopment Block Grant program to award grants to uninsuredproperty owners whose homes were destroyed by hurricane flooding.The price if Congress fails to come to agreement is that thousandsof credit unions, banks and other lenders may get stuck holdingbillions of dollars in worthless loans. The cost will besignificant--as much as $50 billion, according to someexperts.

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