Flood Recovery Efforts in Iowa Slowed by Government Estimates

August 20, 2008

Victims of record flooding are paying mortgages, taxes and repairs on houses that might need to be destroyed, and some are blaming federal and state officials for a slow response.

The lengthy process to get federal buyout offers to homeowners will include detailed eligibility determinations and cost-benefit analyses. The federal money is usually at least 75 percent of the buyout offer.

Those in damaged houses won’t know for about a year whether they’ll get money for the properties. In the meantime, they’re paying for repairs to property damage that could reach into the millions of dollars.

Some must make continued tax and mortgage payments, even if they can’t live in their homes. Others are using government-assistance programs to help pay for repairs to homes that may not be upright two years from now.

“I don’t think it’s fair. I think the city better make some fast decisions,” Nancy Deason of Cedar Rapids told The Des Moines Register.
Deason, 75, is still making a $462 monthly mortgage payment on her uninhabitable home.

For Kathy Taylor, the question is whether she spends the $50,000 or so needed to repair her home, which ultimately could be part of a buyout.

“I was numb for a while,” Taylor said. “You can’t even get your mind around what has happened, but sometimes now I get really angry.”

It is unknown how many homes the city or county will buy in their acquisition programs, said a Federal Emergency Management Agency spokesman. Some of the costs will not be covered by government programs.

The federal government is using the Hazard Mitigation Grant Program, a lengthy process that uses strict guidelines to make sure taxpayer money is targeted at the most likely areas to be hit again by floods, said Bret Voorhees, a spokesman for the Iowa Homeland Security and Emergency Management Division.

Mortgage companies Wells Fargo, Bank of America and Citibank are working to help customers delay payments, but customers ultimately are still responsible for making the payments, said Bob Brammer, a spokesman for the Iowa attorney general’s office.

Pam Carmichael, head of Home Inc., an Iowa housing advocacy group, said the losses are likely in the millions of dollars and are debilitating for hundreds of families.

“From everything I’ve gotten from the flood task force, I would say it’s in the millions,” said Carmichael.

Some residents unable to shoulder the costs will likely abandon the homes and let banks take them in foreclosures.

Federal and state officials have frequently reminded affected residents that the mitigation program is not focused on repaying every cost incurred by floods, and said its focus is on preventing or lessening damages during likely future floods.

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