[StBernard] Road home no faster next door

Westley Annis westley at da-parish.com
Wed Oct 4 18:21:22 EDT 2006


Wednesday, October 04, 2006

John Maginnis

The snail's pace of the post-hurricane housing grant program is provoking
outrage among state politicians. Homeowners who applied in April have heard
nothing back. The Legislature complains about being shut out of the planning
process, while ethics questions swirl around some lawmakers' business
dealings with the program. It is being called the governor's "albatross."

And -- surprise, surprise -- it's not in Louisiana.

Though Mississippi received full federal funding for its housing grant
program six months earlier than did Louisiana, bureaucratic snags have
caused only 75 of 17,000 applicants to receive checks as of Sept. 14,
according to the Mississippi Development Authority. "That's outrageous,"
U.S. Sen. Trent Lott, R-Miss., said. "It baffles me."

Next door, the Louisiana Road Home plan has closed on 11 buyouts and made
190 offers to homeowners for rebuilding grants, out of an estimated 120,000
eligible. But its contractor only began interviewing applicants in August,
which was the deadline Mississippi officials had set -- and blown -- for
completing that program.

According to news accounts, Mississippi's plan, touted as less complicated
and more homeowner-friendly than Louisiana's, is bogged down dealing with
hundreds of mortgage companies that are raising fraud alarms about grants of
up to $150,000 not being used to pay off mortgages or to rebuild houses.
Feeling the heat is Gov. Haley Barbour, who has expressed his own
frustration with the slow pace of the program he created.

The real performance of the two states' programs clashes with the popular
political mythology.

That holds that Mississippi's can-do governor, having taken care of business
in Washington, moved quickly -- even bypassing the Legislature -- to
establish a simplified, streamlined grants program to get checks into the
hands of individuals, who were free to use the money as they pleased once
they paid off their mortgages.

By contrast, Louisiana Gov. Kathleen Blanco, who had to pester the Bush
administration for more money, set up a more complicated, bureaucratic
process that holds award money in escrow accounts until it is disbursed for
rebuilding. Those who sell their homes to the state but do not buy or build
in Louisiana are penalized 40 percent.

The Mississippi plan was supposed to cut through the red tape and
government-imposed requirements that would bind homeowners in Louisiana.

But the Mississippi program could have used a bit more tape. It lacks the
legal authority to require that grants be used to pay off home loans. Though
checks in Mississippi are written jointly to homeowners and mortgage
companies, the firms cannot prevent individuals from cashing their checks
and using the money for something else.

Louisiana's Road Home program was criticized for giving mortgage lenders
more control over rebuilding grants so as to ensure that is what they are
used for. Louisiana Recovery Authority Director Andy Kopplin said, "We
weren't looking to the road to the casino, we're looking to the road home."

The extra time Louisiana spent waiting for all its federal funds allowed it
to work out memorandums of understanding with financial institutions.
Louisiana Bankers Association president Robert Taylor observed, "No doubt
the contractor the state hired looked at Mississippi and took steps not to
repeat what they had done."

On the ethics front, Louisiana had elected officials who cashed in on FEMA
contracts, but no conflict-of-interest questions have been raised about the
Road Home program (yet). Not so in Mississippi, where a congressman is
calling for an ethics investigation of three state legislators who have
contracts with the program to provide legal services on real estate
closings.

In all likelihood, Mississippi will fix its program's flaws and pay out its
awards before does Louisiana, which has seven times the caseload. That's
because Louisiana's plan extends eligibility to homeowners in the flood
plain who did not have flood insurance, a group that Mississippi excludes.
The Mississippi Legislature has since passed a compensation plan covering
more homeowners, but it has no funding for it.
Mississippi's plan puts the homeowner first, while Louisiana tries to
balance the interests of the individual and the community. One can debate
the two guiding principles, but, when it comes to comparing the execution,
while Louisiana still has much to do, Mississippi has much to redo.
. . . . . . .
John Maginnis is an independent journalist covering Louisiana politics. He
can be contacted at www.LaPolitics.com.





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