Hurricane Relief: Update on Homeowner Aid after Katrina
published in USFN Hurricane Article January e-Update
by Robert Klein, CEO
The trio of hurricanes in 2005 brought devastation and despair to many residents of the Gulf Region. Non-insured and under-insured homeowners experienced a financial shortfall severely impacting their ability to rebuild both their homes and their lives. To assist with the rebuilding efforts, a number of federal, state, and local initiatives were created and funded to ensure that resources are available for those in need.?
In?Louisiana, ?The Road Home??program was designed to help residents get back into their homes as quickly as possible. Funded by the Department of Housing and Urban Development (HUD), this groundbreaking program represents the largest single housing recovery program in U.S. history. The program affords eligible homeowners up to $150,000 in compensation for their losses to get back into their homes. The?Louisiana Recovery Authority (LRA) is responsible for administering the funds earmarked for the program. LRA is utilizing an escrow system to distribute approved funds in a similar manner that loan servicers utilize in the handling of insurance loss-draft proceeds.?
In Mississippi, the ?Hurricane Katrina Homeowner?s Grant? program was designed to provide financial assistance to those homeowners outside the flood plain whose homeowners insurance did not cover structural flood damage. The?Mississippi Development Authority?(MDA) is responsible for administering the funds earmarked for the program, and it issues grants directly to the affected?homeowners.??
Over the course of recent months, the Mortgage Bankers Association has been diligently working with the LRA to ensure servicer and investor concerns are addressed. A number of investors have issued recent releases providing guidance regarding the programs and their approval to participate. Participation commences with the submission of the?Memorandum of Understanding, and participants are required to abide by all covenants, including the subordination of the mortgage holder?s lien position to the program.