David Hammer / Eyewitness News
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NEW ORLEANS Acknowledging a 'perception problem' among applicants, the state's top official overseeing the Road Home homeowner recovery program announced new efforts to reach tens of thousands of non-compliant grant recipients.

Pat Forbes, director of the Office of Community Development, told the legislative Hurricane Recovery Committee on Monday at New Orleans City Council chambers that his staff is working to fully adopt the law they passed this summer seeking to improve the Road Home grant recovery process.

The law called for new procedures after our Eyewitness Investigations showed how the program had paid thousands of homeowners who had not rebuilt, but was also sending threatening letters asking for repayments from those who had.

By October, the state says it will send all grant recovery letters by certified mail as well as regular mail; will give the reasons the homeowner is not compliant; will list all of the documentation missing from the homeowner's file; and give a new 90-day period for the homeowner to respond, with reminder letters sent after 30 and 60 days.

And the Road Home will have 60 days from the homeowner's response to come back to the homeowner with a written statement closing out the file, asking for more information or starting grant recovery efforts.

Forbes is also asking the federal Department of Housing and Urban Development, which provided more than $10 billion for the Road Home program, to allow 'self-certification' of homeowners' compliance. In other words, because finding out who has complied has been so difficult, the state is asking HUD to let homeowners simply provide affidavits stating their home is rebuilt and reoccupied, verified by Road Home staff driving by the house.

So far, HUD has asked for more rigorous verification methods, but Forbes said his staff would be meeting with HUD again soon to discuss.

In spite of the new policies and effort to ease the process, questions remain about why the Road Home has struggled so mightily to reach more than 30,000 homeowners.

Nearly 115,000 got grants requiring them to rebuild by now, but only 64,000 have established full compliance. Some are struggling with elevating their homes. Some have unmet needs or suffered contractor fraud, defective drywall or forced mortgage payoffs.

For them, the state has set up various workarounds and additional grants in the last year, but few have taken advantage.

Only 17 homeowners have turned in sufficient documents to have their elevation grant converted into a rebuilding grant, even though more than 1,300 have requested the reclassification. Only 165 got approved for additional funding or reduced grant-recovery under the new Unmet Needs Program. Only 14 have been approved for a Loan Principal Repayment Grant to finish their construction work.

Case-in-point, at Monday's legislative committee meeting, homeowner Melba Legette Barnes complained that she had unmet needs. Committee Chairman state Sen. Ed Murray, D-New Orleans, asked if she had applied to the Unmet Needs Program.

'No sir, I never heard of it until today,' she said.

The committee heard from non-profit leaders and City Councilman James Gray, who along with Councilwoman LaToya Cantrell, led the full council to endorse a 'boiler-room' model for case management.

That would have the state pay $500,000 for local nonprofits to handle the case management services for non-compliant grantees, rather than the Road Home contractor, HGI Catastrophe Services.

The nonprofits welcomed the new policies, but expressed frustration with HGI, which has been paid $111 million since it took over the administration of Road Home in 2009. So did state Rep. Neil Abramson, D-New Orleans, who questioned why the contractor hadn't managed to provide sufficient case management without having to turn to nonprofits who largely volunteer their time and resources.

After all, it's been two years since HUD Secretary Shaun Donovan announced with fanfare that $7 million to $10 million would be made available to help the Road Home provide better case management to ensure compliance before the feds start asking for money back.

'Do we not recognize that we have a problem with the contractor and the type of work that they're doing and that we need to fix this?' Abramson asked Forbes.

The OCD director defended HGI, but also recognized that far too few of the homeowners who appear to be back in their homes have been able to provide the necessary proof to close out their file.

'So, yes, there is at the very least a perception problem with respect to engaging with the Road Home,' Forbes answered.

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