Katrina Renewal Gets Underway.

WASHINGTON -- It looks like the Louisiana Road Home program is finally going to get some money into the hands of citizens who want to rebuild and repair their homes that were damaged by Hurricanes Katrina and Rita.

That should be welcome news for mortgage servicers who continue to exercise forbearance on thousands of homeowners in Louisiana and Mississippi and continue to shoulder those costs.

Since Hurricane Katrina hit the Gulf Coast in August 2005, some 50,000 homeowners have benefited from forbearance, according to the Mortgage Bankers Association.

The MBA estimates 17,000 homeowners in Louisiana and 9,000 homeowners in Mississippi are still delinquent and benefiting from forbearance. And servicers have advanced $258 million to mortgage bond investors to cover the delinquent interest payments.

"The cost to the mortgage industry to offer forbearance on this scale is enormous," Edgar Bright III, a New Orleans mortgage banker, told a congressional panel. Mr. Bright is the president of Standard Mortgage Corp.

The Louisiana Recovery Authority estimates 120,000 residents are eligible for Road Home grants, according to LRA board member Walter Leger. And nearly 30,000 homeowners have been notified of their benefit awards totaling $2.5 billion. The average award is close to $80,000.

However, only 506 homeowners have received grants to rebuild and repair their homes. "I think everyone agrees, this is too slow," Mr. Leger told the House Financial Services Committee on Feb. 6.