Monday, December 04, 2006

Some Good News on the Recovery Front

While most of the recovery news out of New Orleans is still bad, there are always spots of hope. Here are several good news stories from the past week, including two great court decisions in two days:

1) ROAD HOME IMPROVEMENT: The “Road Home” program is the official federally funded, state administered program for distributing rebuilding money to homeowners. Allegedly, anyone whose home was received 100% damage (which is just about everyone) is eligible to receive a $150,000 grant. The program is Governor Blanco’s baby. However, any money you received from your insurance or FEMA is deducted from the total, and if you didn’t have insurance, you’re penalized for that, too. In the end, the average grant has been between $30-$40,000. That's enough for many families to pay off their mortgages, but while it's better to be broke than in debt, it still leaves you with nothing to start with. Furthermore, the Road Home program is a bureaucratic mess – 123,000 homeowners are eligible for the aid, but as of November 14, of 77,000 applicants, 23,500 had been interviewed, 2,500 notified as to how much money they're eligible for, and 27 actually given their cash. Not 2700, not 270. Twenty-seven.

The good news: the program is still a mess, but it may be getting better. Gov. Blanco demanded that 10,000 award notification letters be sent out by the end of November, and the Road Home staff was tripled. The results are mixed, but better than before: the 10,000 letters were indeed mailed out (though 25% contained some degree of error), and the average award is now $64,992.

2) JUDGE PUTS HOMEOWNERS AHEAD OF INSURERS: In the first of our happy court rulings, a Louisiana federal judge ruled in favor of homeowners and against sneaky insurance executives trying to cover their own butts at the expense of hurricane victims.

November 29: “NEW ORLEANS (Reuters) - A Louisiana federal judge has ruled many New Orleans homeowners whose houses sustained water damage after Hurricane Katrina are not excluded from coverage under their insurance policies, a judgment that represents a loss for the insurance industry.

In an 85-page judgment, U.S. District Court Judge Stanwood Duval denied motions by some insurers seeking to stop policyholders from receiving claims they said were prevented by exclusion language spelled out in the policies. The insurance companies argued the industry standard wording for what constitutes a flood covers any inundation of dry land by water. But in his decision, which insurers are expected to appeal, Duval drew a distinction between flooding that occurs naturally and the destructive force of the water that rushed into the city when the levees gave way.”

3) 2ND JUDGE PUTS HOMEOWNERS AHEAD OF FEMA: In our second happy court ruling, a second federal judge ruled that FEMA screwed many homeowners in not fully explaining the rules before cutting their aid, ordering FEMA to restore the aid.

Nov. 30: “WASHINGTON — Condemning the bureaucracy at the Federal Emergency Management Agency as "Kafkaesque," a federal judge yesterday ordered the government to immediately resume housing payments to Gulf Coast residents who lost their homes to Hurricane Katrina. Barely six months after Katrina ravaged the region, FEMA began ending payments to several thousand families still in temporary housing and unable to return to their homes. U.S. District Judge Richard J. Leon said the agency had violated the evacuees' rights by not adequately explaining why it was ending the benefits, making it difficult for storm victims to appeal the decisions.”

But like I say, it’s not all good news. Take me seriously when I say FEMA is screwing up as badly now as it was before the storm.

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