The Foreclosure Report

Hurricane Bailout Bill 'Stalled'

The Times Picayune has an update on the storm related bill in congress. "Last-minute opposition from the Bush administration stalled legislation to create a federal corporation that would buy homes damaged or destroyed by Hurricanes Katrina and Rita, according to the bill's sponsor. But Rep. Richard Baker, R-Baton Rouge, said the administration is willing to move the bill forward early next year if some changes are made."

"Congressional staffers said too many questions were unresolved concerning the overall costs of the housing buyouts. Under Baker's bill, a Louisiana Recovery Corporation would be created and authorized to buy damaged homes, paying homeowners no less than 60 percent of the equity they had in their homes before the hurricane hit. Lenders would get no more than 60 percent of what was owed them. The corporation then would make necessary repairs before selling the property to private developers through a competitive bidding process."

"Baker said he thinks it's the fairest system to give homeowners some return on their investments, banks some return on their loans, and the federal government an opportunity to get some of its spending back as property is sold under a competitive bidding process. Baker said he thinks the White House now concurs."

"Why was it so late in the process before the White House weighed in with objections? Baker said it may well be that administration officials didn't expect such a complicated bill to advance as far it did."

posted by Ben Jones @ 8:12 AM