[FoCHAT] CHATNews: Covenant Deadlines

Sun Nov 29 23:49:25 CST 2009

Nov. 29, 2009
Dear CHAT Members:
Below is information on covenant deadlines for Road Home grants and contaminated drywall. For questions, please see LRA contact information below.
Best wishes,
Melanie Ehrlich
Co-Chairman, Citizens’ Road Home Action Team (CHAT)
http://chatushome.com
Blog: http://www.chatushome.com/blog/?p=64

http://www.nola.com/opinions/index.ssf/2009/11/road_home_isnt_playing_fair_on.html
Road Home isn't playing fair on timetable: A letter to the editor
By Letters to the Editor 
November 24, 2009, 2:47AM
Re: "Owners got grants, but haven't rebuilt," Nov. 22, Page A1
The article about many Road Home grant recipients not following covenants to rebuild within three years does not mention some key facts. LRA Director Paul Rainwater stated, "We're going to be very strict" about allowing extensions of one to two years to the covenant requirement.

However, thousands of applicants received much less money than they were promised in grant award letters, through no fault of their own. Road Home staff frequently admonished applicants who protested grant downsizing that they must wait to appeal only after they signed the closing documents. Thousands of these appeals were subsequently denied by the contractor who determined grant amounts in the first place or by a State Appeals Panel that has never disclosed its guidelines. Also unfair to homeowners is the great delay in awarding elevation grants. 

Clearly, homes should be elevated before rebuilding or repair, but HUD and FEMA elevation grants still are being given out one or two years after applicants signed their Road Home grant covenant. The "backlash against previous efforts to recoup overpayments" briefly noted in the article was centered on the discovery of an attempt of Road Home to get a collection agency to recover "overpayments," including for ICF International's supposed mistakes in determining grant amounts. A 2008 LRA survey found that 55 percent of applicants had not repaired their homes because of insufficient grant funds.

I agree that applicants should use the Road Home grant money to repair or rebuild if they signed a covenant to do so. But two-year extensions of the rebuild deadline won't help most of the applicants who were given less money than originally promised and just don't have the funds to rebuild. 

Melanie Ehrlich
Founder,
Citizens' Road Home Action Team
New Orleans

http://www.nola.com/news/t-p/frontpage/index.ssf?/base/news-13/1258871519256480.xml&coll=1
Owners got grants, but haven't rebuilt
1/4 of Road Home recipients yet to start, survey finds 
Sunday, November 22, 2009 
By David Hammer 
Staff writer 
A worrisome new survey appears to confirm fears that a significant portion of Road Home grant recipients would use the money on something other than rebuilding 
The study of more than 1,800 homes found that more than a quarter of all Lakeview homeowners who got Road Home grants requiring them to rebuild have not begun the reconstruction. One out of 10 homeowners whose Road Home covenants require them to be living in completed homes within the next five months have done nothing. 
As a relatively affluent, mostly recovered neighborhood, Lakeview probably has a higher Road Home success rate than still-struggling areas. That's made it particularly disturbing that of more than 1,800 properties that got rebuilding grants and were monitored for compliance, nearly 500 are either completely vacant or contain uninhabitable structures. 
The state hasn't been able to keep tabs on who used their Road Home grants to rebuild and who hasn't, but one watchful grass-roots group has. 
Beacon of Hope, a nonprofit that helps residents and neighborhood organizations with rebuilding programs, is conducting or directing thousands of in-person property assessments and using mapping software to check their findings against a database of Road Home recipients. 
This month, the group presented the data to the Louisiana Recovery Authority, the state agency that oversees Road Home, and it seems to have changed the government's enforcement strategy. 
A total of more than $3 billion in rebuilding money went to 39,000 homeowners in New Orleans. The vast majority of them got their money between June 1 and Dec. 31, 2007, when the pace of Road Home grants accelerated, meaning they'll have to have their homes rebuilt sometime in the last seven months of 2010. 
But 2,382 New Orleans homes, those belonging to the earliest grantees, face a rebuilding deadline in the next five months. Beacon of Hope founder Denise Thornton said now is the time to identify the relatively small number of people who are on the verge of delinquency. 
The next step would be to separate the hardship cases from the "direct flight" scofflaws, and use the information to show those whose deadlines are approaching that the state now has the tools to track them and take back the money, if necessary. 
Thornton wants the state to hire her nonprofit to provide citywide data, but even if the LRA finds help elsewhere, she said it's time to be proactive. 
"We just want to make sure this gets done," she said. "The state seems to be on board now. If we can get some legislation for grant recovery, we can do our surveys in six-month increments and be ready when thousands of these grants reach the three-year mark." 
Stung by a backlash against earlier efforts to recoup overpayments, LRA leaders have been reluctant to lean too hard on homeowners -- many of whom suffered through long waits and significant confusion just to get their grants. Since taking over as Gov. Bobby Jindal's recovery guru in 2008, LRA Director Paul Rainwater has preferred to push "case management" rather than grant recovery. 
The agency began sending letters this month to people whose three-year covenant deadlines are near, asking such basic questions as whether the current homeowner is the original grant recipient and, if so, whether he or she has rebuilt. Critics say that's too soft an approach. 
"Rather than do a mail-out and tend only to the people who return the cards, let's try to find out who's rebuilt and who hasn't," said Tina Marquardt, who spearheaded the Beacon of Hope analysis. "Let's find out if those who haven't rebuilt are having a hardship or if it's direct flight, then use the Road Home surplus money to help those hardships out and get the money back from the rest." 
After seeing the Beacon of Hope data, the LRA is starting to talk tough and acknowledge the problem, in hopes that the rhetoric will deter people who still have time to comply with the covenants. 
"We're going to be very strict," Rainwater said, although he notes that homeowners can apply for up to two one-year extensions on the covenants. "We have an extension process, but they'll have to prove to us that they're trying to get back into the house. They'll have to prove it to us, because too many people are invested in them being back in New Orleans." 
The LRA is also acknowledging that it needs help to make enforcement work, and Beacon of Hope might be the one to provide it. 
"They appear to be the tool right now," said LRA board member Walter Leger. "Something has to be done. I want to look at their exact methodology because it's got to be done at some point and they seem to be the group that's taken the initiative at getting it done." 
Leger still has concerns about hardship cases, and he notes that forcing homeowners to repay grants will not be easy. Further complicating matters, Road Home recipients had the right to collect the grants and then sell their property to a private buyer. But it's the original owner who is held to the rebuilding covenant. 
So if the state ever moved to recoup a grant in such a situation, it would have to pursue the original owner, who may have left Louisiana long ago, Leger said. Seller would then have to pursue legal action against the buyer to get their money back, assuming the parties forged some sort of agreement before the sale. 
The enforcement problem stems from a policy change in March 2007 that was intended to cut red tape and speed rebuilding. Then-Gov. Kathleen Blanco, under intense pressure from HUD, stopped paying Road Home grants in installments as work got done, and instead paid homeowners upfront, while requiring them to sign covenants promising that the home be rebuilt and occupied within three years. 
Leger finds it ironic that HUD's heavy hand may now force the federal agency to pursue more potential fraud cases. 
"The problem (Beacon of Hope is) beginning to identify is what we predicted when HUD told us to stop (installment grant payments)," Leger said. "The program they forced on us, it sped up the grants, but I told them it would leave us with people who do not rebuild." 
The state, however, bears some responsibility for the late response to the problem. The LRA has never developed a grant-recovery process, and it fought to keep grant data secret. 
The Times-Picayune and Beacon of Hope each spent years arguing with state officials for the right to see the addresses of Road Home grant recipients and their grant-closing dates. The LRA relented this summer, providing the data minus homeowners' names. 
"Public data should be in the public domain," said Michelle Thompson, a professor of planning and urban studies at the University of New Orleans who has been mapping the data for the past two years and worked with Beacon of Hope on its Road Home tracking project. 
A lack of progress doesn't necessarily mean a homeowner has absconded with the aid. Many homeowners are trying -- or were unable -- to recover money from unscrupulous contractors. Still others could not get enough money from Road Home to do the work and couldn't qualify for loans to fill the gaps, which is why the state has just begun a process of paying additional grant money to about 19,000 lower-income applicants. 
And most Road Home recipients still have about a year before reaching their covenant deadlines, leaving Beacon of Hope and other community groups some time to pressure them to get the work done. 
The good news in the data is that, while 27 percent of all Road Home properties in Lakeview are vacant or derelict, only 10 percent of homeowners who are within five months of the covenant deadline fall into that category. 
But Thornton, who has no qualms about pressing lagging neighbors into action, said she hopes the state is motivated to crack down on the worst cases. 
"There are plenty of people who took money and just left and have no intention of complying with the covenants," Thornton said. "If the state focuses its energy on those people, that eradicates blight. And blight is the big word here." 
. . . . . . . 
David Hammer can be reached at dhammer at timespicayune.com or 504.826.3322. 

>From the RH website:   http://road2la.org

What circumstances will be considered for granting an Extension? The following situations will be considered for extensions, NOT WAIVERS: 

Homeowner (s) has experienced an unexpected financial hardship resulting in a household monetary situation that prevents him/her from being able to complete the necessary steps in order to re-occupy the property within the three year covenant period. 
Homeowner (s) has experienced an emergency and/or debilitating health issue that has caused delays in completing the necessary steps to re-occupy the property within the 3 year covenant period. 
Homeowner (s) has made a good faith attempt to secure a contractor/builder to complete the needed repairs to the damaged residence or reconstruct the home; however, due to uncontrollable contractor/builder delays the homeowner (s) will not be able to re-occupy the property within the three (3) year covenant period. 
Homeowner (s) was the victim of an unscrupulous contractor/builder where Road Home proceeds were unlawfully taken and construction work is not completed. 
Homeowner (s) has received Road Home proceeds but the funds have been exhausted prior to the property being returned to a livable standard within the three (3) year covenant period. 
Homeowner(s) has died during the three (3) year covenant period and the heirs to the property are unable to return the property to a livable standard within the three (3) year covenant period. 
Homeowner(s) has received military orders or job reassignment after receiving Road Home proceeds requiring him/her to relocate. 
Homeowner (s) has sold property and transferred the covenant to the purchaser. New owner is not able to return the property to a livable standard within the three (3) year covenant period. 
Homeowner (s) filed for divorce after receiving Road Home proceeds and one spouse has retained grant funds with no intention of fulfilling the requirements of the Road Home Covenant. 
Homeowner (s) repaired/rebuilt property, acquired proper insurance, and re-occupied the property within the three (3) year covenant period; however, due to a subsequent natural disaster, the property was once again made unlivable. Homeowner (s) is not able to re-occupy the property for a second time within the three (3) year covenant period. 
Homeowner (s) repaired/rebuilt property and later discovered that tainted Chinese drywall had been installed in the home. Homeowner(s) is not able to re-occupy the property until the issue with the tainted drywall is resolved. 

What documentation will be required with the written request by the homeowner(s)? 

Financial Hardships: homeowner (s) must provide income documentation in compliance with current Income Policy demonstrating that the household qualifies as low-moderate income. This determination will be made independently of any previous income determination and will have no effect on any previous income determination. 
Health Issues: homeowner (s) must provide written documentation from qualified medical professional demonstrating that he/she is suffering from a medical condition that precludes him/her form being able to re-occupy the property. 
Construction Delays: homeowner (s) must provide a signed building contract demonstrating that (1) there was an agreement to repair/rebuild the damaged residence that has since been cancelled due to circumstances beyond the homeowner’s control or (2) there is an agreement to repair/reconstruct the damaged residence t o a liable standard within the period of time granted by the extension to the three (3) year covenant period. 
Contractor Fraud: homeowner (s) must provide evidence of payments made to contractor/builder demonstrating the attempt to properly use Road Home proceeds. Additionally, the homeowner (s) must provide proof that the rebuilding/repairs were not completed (photos, showing current condition of home, current estimate of reconstruction/repairs from a new contractor, etc.) Homeowner (s) must also provide evidence that he/she has notified the proper authorities of the contractor/builder accused of fraudulent practices. 
Exhausted Funds: homeowner (s) must provide contractor/builder invoices and/or construction material receipts demonstrating that the full amount of Road Home grant proceeds has been spent in the attempt to return the home to a livable standard. Additionally, the homeowner (s) must provide documentation supporting the ability to secure additional funding that will be used to return the damaged residence to a livable standard within a period of time granted by the extension to the three (3) year covenant period including , but not limited to proof of private loan or proof of grant from a non-profit organization or other federal/state disaster recovery program that is deemed to be sufficient funds to complete the remaining steps needed to return the home to a livable standard. 
Death of Grant Recipient: heir (s) to the property must provide a Death Certificate showing that original grant recipients(s) is a now deceased and proper successions document establishing the heir (s) as the legal owner of the property. Additionally, the heir (s) will need to attest to the fact he/she plans to establish the property as his/her primary residence within the period of time granted by the extension to the three (3) covenant period. 
Relocation: homeowner (s) must provide copy of military orders or documentation from employer received after Road Home grant was awarded demonstrating requirement to permanently relocate. 
Assumption of Covenant: new owner (s) of property must provide a recorded Act of Sale document showing that h/she has (1) purchased the property from the original grant recipient and (2) that the Act of Sale contains language transferring the covenant to the new owners (s). 
Divorce: homeowner must provide a court order demonstrating that one spouse retained the Road Home proceeds. 
Subsequent Disaster: homeowner (s) must provide proof of insurance coverage for repaired/rebuilt property; proof of loss demonstrating that repaired/rebuilt property suffered major/severe damage from a natural disaster during the three (3) covenant period. 
Chinese Drywall: homeowner (s) must provide documentation from a certified building inspector or engineer demonstrating that tainted Chinese drywall was installed in the home during the repair/rebuilding process. 

What is the responsibility of the homeowner once the Extension is approved/executed? If the extension is approved, an Extension to comply with the Declaration of Covenants document is executed. The homeowner(s) must have the executed Extension recorded in the conveyance records of the Parish where the property is located. 

Questions?

 Contact christina.stephens at la.gov, thomas.brennan at la.gov, 

carol.newton at la.gov,  or 

dotty.tapscott at la.gov

http://www.wwltv.com/news/local/Deadline-approaching-for-tainted-drywall-lawsuit-76461097.html
by Maya Rodriguez / Eyewitness News
Posted on November 27, 2009 at 4:18 PM
Updated today at 4:18 PM 
NEW ORLEANS -- The deadline is nearing for plaintiffs to join a class-action lawsuit involving defective Chinese drywall. The lawsuit involves drywall manufactured by a German company called Knauf Plasterboard.
Homeowners with that type of drywall in their home have until Dec. 2 to join the class action lawsuit.

Read the complete article at the link above.

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