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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (41309)	9/11/2005 2:08:45 PM
From: ild	Read Replies (2) \| Respond to of 110194

KATRINA'S AFTERMATH Who'll return, and to what? latimes.com What are homeowners facing? Those with minimal insurance coverage and little home equity will find it difficult or impossible to rebuild or even repair their homes, said Anthony B. Sanders, professor of finance at Ohio State University. The reason is that those who do not own their homes outright and are making mortgage payments must continue to pay on their loans even if they're currently unemployed, which is the case for many of the evacuees. "They're cooked," Sanders said. Although some lenders are offering temporary payment reprieves, many Gulf Coast homeowners will be unable or unwilling to continue paying for ruined homes on what may be environmentally tainted land. When payments cease, said J.R. DeShazo, an associate professor at UCLA's School of Public Policy and Social Research, banks will likely foreclose on the properties. Those banks will get stuck holding the land while they hope and wait for a federal bailout. Meanwhile, land speculators are waiting in the wings, expected to swoop into town ready to purchase blighted areas. "Developers and builders will make a lot of money," DeShazo said. Those who walk away from their mortgages will face soiled credit ratings and, starting Oct. 17, a new bankruptcy law that is less sympathetic to their plight. In a city that was 80% under water, about 60% of the homeowners did not have flood insurance. Many plans exclude coverage for flood damage and as many as 50,000 owners may have no coverage at all, said Barry B. LePatner, a lawyer and consultant to developers. Often, when homes were inherited, the owners didn't carry insurance for various reasons — the inability to pay for it chief among them. And then there are homeowners who are covered by insurance, but with policy limits. If repairs come to $200,000 — a likely scenario in flood-ravaged New Orleans — and the policy payout is capped at $100,000, the owners must either try to rebuild with the $100,000, attempt to sell the house or walk away from the property with the cash.