Safeguard Properties Inc., recently received reports regarding a decision by the Louisiana Recovery Authority that assistance grants going to homeowners with hurricane-damaged properties need to be placed in escrow accounts. Please see below for excerpts of the report along with a confirmation email from the LRA to Robert Wooley, the former Insurance Commissioner for the State of Louisiana.

"Compensation to the homeowners with mortgages will be disbursed at closing directly to an escrow account with the homeowner's lender,"

"Mortgage lenders and servicers have urged Louisiana and Mississippi to require escrow accounts as a way to ensure that the Community Development Block Grant funds appropriated by Congress are used for repairs and rebuilding. Mississippi decided to disburse the grant assistance directly to homeowners. Louisiana is going with escrow accounts."

"LRA officials are still discussing whether homeowners who own their homes outright and don't have a mortgage should be required to have escrow accounts."

-----Original Message-----
From: Melissa McCormick Landry
Sent: Tuesday, July 11, 2006 2:55 PM
To: Robert Wooley
Subject: RE: Louisiana Goes for Escrow Accounts

Commissioner,
 
The quote in the article is technically correct.  I would also add the note which explains that Louisiana's plan is to make awards to homeowners with mortgages in the form of two-party checks so that both the homeowner and the mortgage lender have to sign off on the account. The outcome will be the same of what the article suggests, which is that homeowners will be encouraged to use the funds to repair and rebuild their homes.
 
I hope this is helpful.  Please let me know if you need anything else.
 
Best regards,
 
Melissa
 
Melissa McCormick Landry
Deputy Communications Director
Louisiana Recovery Authority