Skip Nav
28 Cool Ideas For a Summer Wedding
The Podcast That Lets You Listen to Couples Therapy Sessions Is So Damn Satisfying
This Couple Showed Their Love For Travel With the Cutest Airport Engagement Shoot

Katrina Survivors Required to Repay Rebuilding Money

In another blow to Hurricane Katrina survivors who've struggled to rebuild their lives, some are receiving crushing phone calls — they may have to refund thousands of dollars of grant money they received to rebuild. Apparently in the rush to get aid to homeowners in need, over-payments were rampant.

The contractor who was hired to distribute payments from the Road Home grant program has just uncovered 1,000 to 5,000 cases that it says will require collection effort. How much? The average amount to be collected is estimated to be about $35,000, and in some cases it may be as high as $100,000 to $150,000.

As that's the biggest grant amount allowed by the Road Home program it's clear that some applicants received the maximum when they didn't qualify for a penny. But the trouble isn't limited to over-payments. To find out,


About a third of qualified applicants for Road Home grants had yet to receive any rebuilding money as of this past week. The picture above is from the second anniversary of Hurricane Katrina. Two years later the people in the picture are still living in their formaldehyde-contaminated FEMA trailer behind their house. With that in mind it seems this statement from the executive director of the Louisiana Recovery Authority about over-payments seems unbelievable: ''The state must walk a fine line of treating homeowners who have been overpaid with fairness and compassion and ensuring that all federal funds are used for their intended purpose.''

Is it clear yet that we've utterly failed the residents of New Orleans? What in the world can we do to fix this?


Join The Conversation
dlea143 dlea143 9 years
So, we can send $10 billion a month to Iraq (one of the richest oil countries in the world) and they want to fret about recovery funds sent to those in need in the New Orleans region?!?
wickk23 wickk23 9 years
you want to do these people a favor, how about a damn hospital. is that too much to ask for. because they don't have one. you ask what the efforts to revive charity are and you get a smirk and shrug. tulane doesn't care about anyone and they do horrible work anyways. i know this from experience. i just returned from there, i moved before the storm, and it is depressing as hell......
palesugar palesugar 9 years
minaminamina: I was down in NOLA a few weeks ago for Spring Break, and we stayed in Marquette House, which is in the gorgeous Garden District and really close to a streetcar stop. It's super cheap too, and a ton of interesting people stay there. You should check it out! As for this, I agree that attempting to collect this money is a terrible idea. It was the government's fault, the people shouldn't be punished for their mistake, and have to come up with money that's probably already been spent.
syako syako 9 years
"It almost makes me ashamed to be an American." Well if you had read the other comments, you would have seen that the fault of choosing this company lied with the LOUISIANA governor, not the federal government. She chose to contract this company because of some silly buddy-buddy system that still persists in Louisiana politics today. So the money is from the FEDERAL government and the STATE f-ed up on this one. So if you were from Louisiana, you could say you're ashamed to be a Louisianan, but American? I don't think so.
jimmalou1978 jimmalou1978 9 years
How awful! If it was the company's mistake, they should be the ones fixing it...not the people who got the money. So they got the maximum and didn't qualify for anything? Whose fault is it that they got the money? It's not the homeowners' faults; it's the company that issued the loans. They should have to eat the cost, instead of trying to collect money from people who have lost everything, and still don't have anything to show for it! This just makes me sick. And Stephley is right; the company would probably just declare bankruptcy. What an awful insult to injury to the people of New Orleans and everyone else whose lives got destroyed by Katrina. It almost makes me ashamed to be an American.
angelfromlsu angelfromlsu 9 years
I'll be the 3rd one of my friends to wed in New Orleans after Katrina. One was an all-out St Louis Cathedral type and the other an elopement. So many different flavors and they were all so memorable.
i thought about getting married in the french quarter. that was before katrina though
when is this going to end for those poor people? enough is enough. its a shame their houses arent already rebuilt anyways
syako syako 9 years
my parents live in Mandeville too!!
angelfromlsu angelfromlsu 9 years
I'm doing my part by getting married in NOLA. My original plans were at my parent's home in Mandeville or my home in Baton Rouge. French Quarter weddings are so special.
raciccarone raciccarone 9 years
I hope that money goes to those poor people at Bear Stearns!
ehadams ehadams 9 years
This is terrible. I still can't believe the government isn't doing more to help these poor people. Is there anything the average person can do? I don't have tons of money to spare unfortunately.
syako syako 9 years
I'll have to ask friends about that one - I've never stayed in a hostel in n.o. Let me get back to you! But I'm super excited you're going to visit n.o.!
juju4 juju4 9 years
This makes me sick. The company that made the mistake should be responsible for correcting it. I guarrantee you that the money has already been spent, and these poor people are going to have to deal with ANOTHER financial set back.
minaminamina minaminamina 9 years
syako point me to a good hostel (cheapass! my money will be well spent elsewhere, I don't care where I stay as long as it's a bed), I'm planning on going for a few weeks in May.
syako syako 9 years
I understand. The whole situation is exasperated if you ask me. It's frustrating though as a resident of La and growing up in New Orleans to see how much is still in ruin. I mean, not all the street lights are working still. STREET LIGHTS! That's basic to me! It is a mess and it will take a lot of work, money, politics (unfortunately) but it is a great city and I hope that everyone on Citizen will take a good long vacation to the Big Easy and help put some revenue in our tourism. If you want to go, let me know and I'll give you insider tips on all the great places you shouldn't miss.
stephley stephley 9 years
An exasperated remark - it seems whatever the government does to help New Orleans ends up hurting, so it should just stop adding insult to injury. The government can't leave New Orleans, I know that.
hypnoticmix hypnoticmix 9 years
Yes we have failed our fellow citizens in New Orleans in more ways than one. With respect to this topic in my opinion the problem is too much paper work, not enough staff, public and political pressure to act quickly, and simply the sheer magnitude of the recipient's involved. This clearly is going to be investigated on a case by case basis and I think that if the over payment was as a result of fraud or a mistake on the filers part than of course the money should be returned. However, if the over payment is due to a government error than I say cut your losses and enjoy a lesson learned. The problem still remains that many of us are poised for the same let down because many of the systems that failed New Orleans are still in practice today on a national level. If one of our communities were hit with a disaster of that caliber the question to ask is would we fair much better. On that note I do have to give props to the very criticized and butt of many a joke Gov. in training Schwarzenegger. He did his best to learn from the mistakes of the Katrina response and implemented those lessons learned when wild fires ran a muck here in California. He was praised on a bipartisan level and this is the kind of leadership that we need in this area, proactive.
syako syako 9 years
steph what do you mean pull out?
syako syako 9 years
Here's the problem: "The prospect of Road Home grant collections comes less than two weeks after the Louisiana inspector general and the legislative auditor said they were investigating why former Gov. Kathleen Blanco paid ICF an extra $156 million in her waning days in office to administer the program. With the increase, ICF stands to earn $912 million to run Road Home, a contract that also sweetened its initial public stock offering, and helped it buy out four other companies. It now reaches into government contracting sectors that include national defense and the environment." (From the linked article) Gov. Blanco decided to contract this work out to a company who appears to have been in it for all the wrong reasons. That was one of the main problems we've had. Everything was done in such haste that the usual bidding and other normal processes of state government went out the window and friends/donors of La's politicians got all the contracts...
stephley stephley 9 years
How much is it going to cost taxpayers to straighten this out? Probably more than its worth. Since the contractor made the mistake, why not make the contractor fix it? Because the contractor would declare bankruptcy; so the government will just pay people to harass the homeowners. The U.S. should probably just pull out of New Orleans.
Prince Philip Over the Years
Megan Couto Becomes First Woman to Captain the Queen's Guard
Things to Do in New Orleans
Chelsea Manning Nightline Interview on Being Transgender
From Our Partners
Latest Love
All the Latest From Ryan Reynolds