Janet S. Owens, storm victim Eileen Thaden, James T. Smith Jr.

Anne Arundel County Executive Janet S. Owens (left) links hands with storm victim Eileen Thaden at yesterday's hearing. At right is Baltimore County Executive James T. Smith Jr. (Sun photo by Monica Lopossay / February 3, 2004)

Karen DiMario hadn't lived in an apartment a single day in her life. But in the four months since the flood waters of Tropical Storm Isabel wiped out the home on Dundalk's Bear Creek that she and her husband had shared for 14 years, she has found herself driving every night to a place that feels like anything but home.

"We're no better off than we were the day after the storm," she said.

The DiMarios and dozens of other Isabel victims from Anne Arundel and Baltimore counties packed a committee room in Annapolis yesterday to support two proposals that state lawmakers say would help them obtain financing to rebuild or rehabilitate their homes.

Contained in House Bill 3, the proposals that were considered yesterday by the House of Delegates' Environmental Matters Committee have broad support from state lawmakers, including House Speaker Michael E. Busch, who is the lead sponsor of the enabling legislation, and from Gov. Robert L. Ehrlich Jr.'s administration.

Del. Maggie L. McIntosh, a Baltimore Democrat who heads the Environmental Matters Committee, said that between 200 and 300 families are still living in trailers or in other temporary housing months after the storm. The Ehrlich administration estimated this week that insurers and federal, state and local agencies have paid $340 million in claims, grants, loans and other assistance, but that $17 million in housing needs are unmet.

McIntosh said this bill, which takes advantage of $4.6 million in state reserve funds, would fill the gaps between private insurance and other assistance programs so those storm victims can return to or rebuild their homes.

The bill would allow the state to offer second mortgages to storm victims at low interest rates -- between 0 percent and 2.5 percent, depending on the applicant's income. Under the program, storm victims would be able to defer principal payments until they sell or transfer ownership of the house.

The idea, McIntosh said, is that victims would be able to rebuild or repair their homes without paying much more than the cost of their original mortgage.

It would also provide state government guarantees for a portion of privately issued first mortgages. Some storm victims have found that to rebuild a home to code standards, they need mortgages in excess of the home's previous worth, but banks will not typically issue mortgages for more than 90 percent of a home's value, McIntosh said. The bill would allow the state to guarantee the portion of a loan between 90 and 115 percent of its worth.

With the $1.6 million the state will be able to offer for this program, banks will be able to make $100 million or more in loans, she said.

"This is a bill not about housing. It's about hope," McIntosh said. "I hope it is a first ray of hope for these families."

No vote is scheduled on the bill, but it is written as an emergency measure that would take effect as soon as the governor signs it.

Baltimore County Executive James T. Smith Jr., who along with Anne Arundel County Executive Janet S. Owens and Harford County Executive James M. Harkins testified in support of the bill, said the danger for Baltimore County is not just that people will be without their homes. If people are forced to sell, much of the blue-collar tradition of the communities lining the county's east side will be wiped out.

"We wouldn't just be losing homes. We would be losing the communities these people built," he said.

Smith plans today to release a report he commissioned from former Maryland Insurance Commissioner Steven B. Larsen detailing complaints about the insurance industry in the aftermath of the storm and making recommendations for legislation that could reduce the number of disputed claims in future storms.

The Isabel victims who testified yesterday described a paperwork nightmare as they tried to navigate Federal Emergency Management Agency grants, National Flood Insurance and private homeowners insurance policies, Small Business Administration loans and any number of other federal, state and local assistance programs. Jack Schmidt, a storm victim from Baltimore County who testified before the committee, lugged a duffel bag with 30 pounds of paper he's amassed since the storm while trying to get help to rebuild.

The storm victims uniformly testified in favor of the bill, though some said more needs to be done to help those who lost their homes, particularly the elderly, many of whom can't afford to take on debt. Jackie Nickel, an east-side community activist, said would-be buyers are cruising around the waterfront neighborhoods hunting for bargains, as longtime residents who can't afford to rebuild are forced to sell what's left of their homes.

"There are going to be a lot of for-sale signs come spring," she said.