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Flood-insurance program begins making offers to settle lawsuits

The National Flood Insurance Program has begun making formal offers to settle all 1,800 lawsuits filed by homeowners who say they were underpaid on superstorm Sandy claims.

The proposals, which storm victims began receiving this week, come 10 weeks after officials began negotiations to resolve the cases, which drew widespread attention over allegations that storm victims were intentionally defrauded.

"This is good news for the hundreds of Sandy victims in need of this settlement money, who will now receive this deserved-yet-delayed flood-insurance money," said Sen. Charles Schumer (D-N.Y.), who is among the lawmakers who pushed to settle the cases.

The offers will go out in the coming weeks. Once homeowners accept, the Federal Emergency Management Agency, which runs the flood-insurance program, will process checks, which could take several weeks. Schumer said FEMA has pledged to resolve every case by June 1.

FEMA initiated the talks in February after a judge concluded fraudulent underpayments may have been widespread. The allegations have led to a criminal probe and prompted FEMA to review all 144,000 Sandy claims.

Lawyers for homeowners say the settlement offers are welcome. But many recipients will still not have enough to rebuild everything they lost, they said.

Most will owe up to a third of settlements to their lawyers. Others have federal disaster loans. And those who received grants from the state's storm recovery program, New York Rising, may have to return that money if their expenses are now covered by the settlements.

Still the offers will provide finality, said Denis G. Kelly, a Long Beach attorney who helped lead the talks. "Seeing it in writing," he said, "will give my clients some certainty that it might be soon over."

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