Rep. Richard Baker, R-La., has joined his Louisiana Recovery Corp. bill with a special $10 billion Community Development Block Grant program that would help finance the rebuilding of houses and businesses in Gulf Coast states devastated by hurricanes Katrina and Rita.The LRC would focus mainly on Louisiana and authorize the special corporation to issue U.S. government-backed bonds to purchase property for redevelopment and relieve homeowners of their mortgage obligation. Owners would have the option to rebuild in their neighborhoods or completely walk away from properties. Rep. Baker argued during a House Financial Services Committee mark-up of a flood insurance bill that his LRC and CDBG proposals are a better solution to problems facing owners with severely damaged homes than an amendment by Rep. Mel Watt, D-N.C., which would allow homeowners to purchase retroactive flood insurance. The Watt amendment, based on a bill sponsored by Rep. Gene Taylor, D-Miss., was voted down by a 34-32 vote. Rep. Baker has circulated his proposals to the White House, the Treasury Department, and the Federal Emergency Management Agency, and he wants them included in a Katrina legislative package the House is scheduled to consider during the week of Dec. 5.

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

30-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry