Aid flap is new threat to New Orleans rebuilding (Reuters)

[Eugene]

Source: Reuters

Aid flap is new threat to New Orleans rebuilding

By Gina Keating
Sun Apr 8, 9:12 PM ET

NEW ORLEANS (Reuters) - As homes in New Orleans' flood-stricken zones
inch toward habitability, a bureaucratic storm is brewing between state
and federal relief agencies that could derail the city's recovery from
Hurricane Katrina.

The dispute over how $7.5 billion in federal aid is handed out is slowing
disbursal to more than 120,000 homeowners whose houses were damaged
or destroyed by the storm on August 29, 2005 and by subsequent flooding.

Officials from the state of Louisiana contend that a new federal requirement
that aid checks be issued jointly to homeowners and their mortgage lenders
could mean that money bypasses the owners -- many of whom lost their
jobs as a result of Katrina -- and goes straight to paying their defaulted
mortgage payments.

A federal official said the government, in demanding a change in payout
procedures, was relying on lenders to act fairly to New Orleans homeowners.

"If banks simply grab this money as a way to compensate for their subprime
losses, we would not consider that the moral thing to do," said Bruce
Sullivan, a spokesman for the U.S. Department of Housing and Urban
Development.

-snip-

Read more: http://news.yahoo.com/s/nm/20070409/us_nm/neworleans_housing_dc_1

[Kurovski]

1. K&R.(nt)

[Tandalayo_Scheisskopf]

2. And you know what?

For the first time in a long time, it looks like someone in government has been paying attention.

Good on them.