UPDATE 6-At least 270 dead in Brazil floods, landslides
* Heavy rains cause landslides, floods in southern Brazil
* At least 270 dead, toll expected to rise
* President Rousseff releases funds, will overfly region (Writes through, adds quotes, details)
By Pedro Fonseca and Stuart Grudgings
RIO DE JANEIRO, Jan 12 (Reuters) - Floods and landslides devastated several mountain towns near Rio de Janeiro on Wednesday, killing at least 257 people as torrents of water and mud swept through the region, burying many families as they slept.
The heavy rains also killed 13 people in Sao Paulo state on Tuesday, bringing the total death toll in Brazil's south to at least 270.
Hillsides and river banks in the picturesque Serrana region north of Rio buckled under the equivalent of a month's rainfall in 24 hours, destroying houses and killing many people early Wednesday, rescue officials said.
Television images showed many houses buried in mud as desperate residents and rescue workers searched for survivors.
"There was no way of telling which house would fall. Rich and poor -- everything was destroyed," domestic worker Fernanda Carvalho was quoted as saying by the Globo network's website.
At least 130 people were killed in Teresopolis, about 62 miles (100 km) north of Rio, town officials said. At least 20 people were killed in the city of Petropolis, and 107 in the town of Nova Friburgo, state officials said in an e-mailed statement.
The number of victims was expected to rise as rescuers find more bodies and reach more remote areas.
"I believe the number of dead is much more than was announced so far," Rio state environment secretary Carlos Minc was quoted as saying by Globo television after he flew over the region. "Many people died while they were sleeping."
About 50 people were believed missing just in Teresopolis, Mayor Jorge Mario said.
"Rescue teams are still arriving in the areas that have been worst affected," he said, adding that about 1,000 people had been left homeless. "It's the biggest catastrophe in the history of the town."
Brazilian President Dilma Rousseff signed a decree releasing 780 million reais ($460 million) in reconstruction funds for the affected areas. She was due to fly over the region on Thursday.
Thousands of people in the region were isolated by the floodwaters and cut off from power and telephone contact.
The downpour caused at least one river to burst its banks, submerging cars and destroying houses in Teresopolis, television images showed.
"I saw six bodies on my street," 53-year-old Teresopolis resident Antonio Venancio, whose house was inundated with mud but remained standing, told Reuters by telephone. "We just don't know what to do in the face of something so horrible."
Rio state Governor Sergio Cabral said in a statement he had asked the Navy for aircraft to take rescue crews and equipment to the region, which was partially cut off from Rio by road.
In Nova Friburgo, three firemen were missing after being buried by a mudslide while they tried to rescue victims, according to fire officials. One three-story house collapsed on Tuesday, killing three people, including two children.
Buses and trucks were shown stranded on streets with floodwaters reaching up to their windows.
Many poorer Brazilians are especially vulnerable to landslides because they live in unsafe, illegal housing, often built precariously on hillsides. Major landslides in April in the Rio killed about 180 people in slum communities.
(Additional reporting by Rodrigo Viga Gaier; Writing by Stuart Grudgings; Editing by Stacey Joyce)