Thousands of Quake Victims Must Repay Aid

The Federal Emergency Management Agency has ordered thousands of victims of the Northridge earthquake to repay a collective $17.5 million in emergency relief funds.

FEMA officials confirmed Thursday that 6,761 Southern Californians, many of them residents of mobile home parks, have been asked to repay grants from the agency if they were later reimbursed for the same losses by insurance companies or agencies such as the Red Cross or the federal Small Business Administration.

“When the disaster first hit,” said FEMA spokeswoman Val Bunting, “we provided funding, but with the caveat that if they also had homeowners insurance, then once the insurance came through, people would have to pay back the money.”

But many quake victims, like 81-year-old Emily Notaro, didn’t realize that some of the money was supposed to be returned.

Notaro, who lives in a nursing home, can’t afford to pay the $374 that FEMA wants back, said her daughter, Linda Slomkowski.

“FEMA said, ‘This is for you to get through the earthquake,’ ” said Slomkowski, who lives in the Mission Hills mobile home park where her mother also lived before the quake. “Now they say they want it back.”

Judy Burgard, FEMA’s human services officer for Southern California, said the provision stating that any duplicative funding would have to be repaid is written on four pieces of correspondence that go along with a FEMA grant, including the document that recipients must sign to receive their money.

Still, she admitted, the demand letters that the state has been sending out for the past 14 months have ruffled some feathers.

“In the beginning, there’s all this chaos, and we understand that people might not remember,” Burgard said.

People who might be required to repay funds typically fall into three categories, Burgard said. Some are homeowners or mobile home owners who, after taking the FEMA grant, received insurance payments for the same emergency repairs. Others received funding from FEMA but later disclosed that the damaged homes were in fact not their primary residences.

Others, she said, obtained benefits fraudulently.

Burgard said that “a few million” of the $17.5 million in overpayments has been returned, but the agency is still working to recover the rest. Many homeowners owe thousands, but are making payments as small as $50 a month, she said.

She also recommended that homeowners retain all records of work done on their homes for at least three years, because FEMA plans to conduct random audits of aid recipients to catch double-dipping.

Most people affected are owners of mobile homes, because they were more likely to receive emergency aid for immediate repairs.

People with more expensive homes tended to have too much damage to fall under FEMA’s guidelines for upfront repair money, which is limited to homes that can be made habitable for no more than $10,000.

Owners of single-family homes and condominiums tended to have more damage, so the agency gave them money for temporary housing rather than emergency repairs. Such homeowners probably would be asked to repay the agency only if their insurance policies reimbursed them for emergency housing.

“It all boils down to duplication of benefits,” said FEMA coordinating officer Leland Wilson. “That’s the bottom line.”