[StBernard] State Officials say 'Road Home' applicants won't get checks; money will be put into accounts

[Westley Annis]

01:58 PM CDT on Wednesday, July 12, 2006

Alan Sayre / Associated Press 
  
There's a message for owners of hurricane-damaged homes in Louisiana who are
waiting to pick up their checks from the state: Forget about it. 
 
Officials managing the $9 billion-plus program aimed at providing Louisiana
residents up to $150,000 to rebuild or sell their storm-wrecked homes said
Wednesday that the money will go to escrow accounts and will be issued on an
as-needed basis. 
 
"A message needs to be clear," said the program's director, Mike Byrne,
during a conference call with reporters. "A homeowner will not be picking up
or receiving a check in their hands." 
 
On Tuesday, federal housing officials agreed to provide another $4.2 billion
to fully fund the Louisiana program, which provides grants to cover repair
costs -- or buyouts -- above what was covered by insurance policies and
grants from the Federal Emergency Management Agency. 
 
Walter Leger, chairman of the housing task force with the Louisiana Recovery
Authority, said that, so far, about 90,000 have registered for the program
and as many as 123,000 are expected. The program will be administered
through 10 sectional centers in Louisiana and should be in "full force" by
the end of August, he said. 
 
In the meantime, 500 victims of hurricanes Katrina and Rita who already have
registered are being asked to participate in a pilot program in Baton Rouge
to check out the application and screening process from top to bottom,
officials said. That phase should take four to six weeks, Byrne said. 
 
Officials have been in extensive consultations with federal and state
authorities about how to detect fraud -- even studying fraud-related
problems that plagued FEMA following the storms. 
 
"That's one of the reasons for the pilot program," said Suzie Elkins,
director of the state Office of Community Affairs, which is o verseeing the
program. "We want to make sure all of the controls are there to prevent
fraud from occurring." 
 
Leger warned that the process will be complicated: Damage claims and
ownership will be checked, documentation will have to be provided for repair
work, and, in the case of property buyouts by the state, clear title will
have to be proven. 
 
Byrne said an "uncomplicated case" with documentation and no title problems
would likely take six to eight weeks to process, but any paperwork problems
would extend that time. 
 
Under the program, $6.34 billion will be available for homeowners, $1.53
billion will be provided for landlords to rebuild rental property and $1.5
billion will be used for hazard mitigation and buyouts. Homeowners basically
have one of four options: repair, rebuilding at the current site, relocation
and rebuilding at another site in Louisiana, or a total buyout for those who
don't want to rebuild and intend to leave the state. 
 
Elkins said that although the federal government would allow the state to
use up to 5 percent of the entire program for administrative costs, the
state had created a budget putting that figure at about 2 percent. The
startup will cost around $87 million. 

Leger said that the potential for abuse goes beyond fraudulent applications.
He warned of such possible scams as telephone calls asking for credit card
numbers and people posing as "Road Home" officials who ask for upfront money
-- something that applicants won't have to provide -- and even fake
application offices. 
 
"We are working hard to avoid the inappropriate use of that money," Leger
said. "We want that money to go back to restoring the housing stock in
Louisiana and not be used for reasons that might be deemed not appropriate."

 
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My reading of this is it appears it will be like the SBA repair process.
Dole a little out, spend that (and more) then submit receipts to get some
more.
 
It is because of LA's reputation for corruptness that the LRA feels they
can't trust the citizens?  Why couldn't they do like Miss. and follow KISS:
Keep It Simple Stupid!
 
JLY