The House Financial Services Committee has approved by a vote of 50-9 a bill to create a U.S. government agency to fund and oversee the rebuilding of New Orleans and other areas of Louisiana devastated by Hurricane Katrina.The Louisiana Recovery Corp. could buy up residential land and take over mortgages to facilitate redevelopment by private contractors. According to the sponsor of the bill (H.R. 4100), Rep. Richard Baker, R-La., the LRC could pay property owners a minimum of 60% of the homeowners' equity in the home, and the mortgage lender could receive a maximum of 60% of the unpaid principal on the mortgage. The homeowners could have an option to repurchase the property after development, but they would have to pay the market price. The LRC could issue U.S. government-guaranteed bonds and would be allowed to have up to $30 billion in outstanding financing at any one time. H.R. 4100 also directs $13 billion in community development block grant funds to help with redevelopment in the Gulf Coast states hit by hurricanes Katrina and Rita.
