[StBernard] Committee Approves Baker's Louisiana Recovery Corporation Act

[Westley Annis]

Committee Approves Baker's Louisiana Recovery Corporation Act

Today, by a vote of 50-9, the Financial Services Committee approved H.R.
4100, the Louisiana Recovery Corporation Act.  The legislation, introduced
by Capital Markets Subcommittee Chairman Richard H. Baker (LA) on October
20, 2005, would offer financial stability to property owners and facilitate
community rebuilding in hurricane-ravaged Louisiana.

The Louisiana Recovery Corporation Act would establish the Louisiana
Recovery Corporation (LRC) that will work with willing property owners to
purchase residential and commercial property, relieving hurricane victims of
their mortgage obligations up to $500,000 and transferring title to the LRC.
Bonds issued by the Treasury Department would fund the acquisitions.  The
LRC would then make necessary infrastructure repairs before selling the
property to private developers through a competitive bidding process.  

Rep. Baker said, "This is a major step toward providing urgently needed
financial options to tens of thousands of Louisiana citizens who right now
face terrible choices, between continuing to pay the house note on a
destroyed home they will never live in again or accepting foreclosure and an
impaired credit record.  It's also a step toward rebuilding communities
through the maintenance of a functioning market system, safeguarding a
lending industry that will be essential for financing recovery efforts, and
utilizing private sector resources to provide a fiscally responsible return
on the taxpayer's investment.  I thank Chairman Oxley and Ranking Member
Frank and all my committee colleagues who joined in telling the people of
Louisiana that we're doing all we can and as quickly as possible to assist
them in their time of need."

Following Hurricanes Katrina and Rita, tens of thousands of Louisiana
property owners face uncertainty about whether they can or should rebuild.
For those with mortgages, the 90-day forbearance period most banks granted
borrowers has or will soon expire.  Those who own their property outright
also are in doubt about insurance and other payments being sufficient to
rebuild.

The LRC would be comprised of a seven member-board.  Four board members
would be appointed by the President and three would be nominated by the
Governor of Louisiana.  This board will oversee the redevelopment of
Louisiana damaged by the Hurricanes based on plans made at the local level.