Washington ? Condemning the bureaucracy at the Federal Emergency Management Agency as “Kafkaesque,” a federal judge Wednesday ordered the government to immediately resume housing payments to Gulf Coast residents who lost their homes to Hurricane Katrina.

Barely six months after Katrina ravaged the region, FEMA ended benefit payments to several thousand families still in temporary housing and unable to return to their homes.

U.S. District Judge Richard J. Leon said the agency had violated the evacuees’ rights by not adequately explaining why it was ending the benefits, making it difficult for storm victims to appeal the decisions.

“It is unfortunate, if not incredible, that FEMA and its counsel could not devise a sufficient notice system to spare these beleaguered evacuees the added burden of federal litigation to vindicate their constitutional rights,” he wrote.

Leon ordered the agency to explain its actions, restore short-term benefits to evacuees who had been cut off and give them the two months of housing payments they would have received after payments finally stopped in August 2006. The ruling affects 11,000 families, mostly in Louisiana and Texas.

The judge cited letters from FEMA that gave contradictory explanations for decisions. He also described FEMA’s practice of conveying its decisions “cryptically … by a code or phrase” decipherable only after evacuees obtained a separate pamphlet explaining the codes.

The judge quoted one evacuee telling of her efforts to get her benefits restored:

“The reasons I have been given for the termination are not what is in the documents, and/or the reasons change each time I call,” Carmen Handy wrote to the court. “Every time I call back, the person answering the call knows nothing about what the previous person told me.”

Also this week, a federal judge in Louisiana made an unexpected ruling that could result in more homeowners collecting money for flood damage caused by Hurricane Katrina – at a likely cost of more than $1 billion to the industry.

U.S. District Judge Stanwood Duval Jr. on Monday sided with New Orleans homeowners who argued the language excluding water damage from some insurance policies was ambiguous.

Although he said the lawsuit against The Allstate Corp., The St. Paul Travelers Companies Inc. and other insurers could go forward, he also said the issue of “flood exclusion” was so central to the case that it could be appealed immediately by the insurers.

Spokesmen for both Allstate and St. Paul Travelers said they planned an appeal.