UPDATE 2-Obama ramps up recovery help for tornado-hit South

* Deaths from 2nd deadliest US tornado disaster reach 350

* Obama dispatching senior officials to devastated areas

* Survivors in shelters, camped out in shattered homes

* Property insurance losses estimated at $2 bln to $5 bln (Adds survivor story, false report of three rescued alive)

By Verna Gates

PLEASANT GROVE, Ala., April 30 (Reuters) - The U.S. government ramped up efforts on Saturday to help thousands of homeless victims of the country's second deadliest recorded tornado outbreak, which killed at least 350 people.

President Barack Obama, who surveyed the tornado destruction in the worst-hit state of Alabama on Friday and called it "heartbreaking," was sending top officials to the disaster zone this weekend to escalate federal assistance.

With some estimates putting the number of homes and buildings destroyed at close to 10,000, state and federal authorities in the U.S. South were still coming to terms with the scale of this week's devastation from the country's worst natural catastrophe since Hurricane Katrina in 2005.

Thousands of stunned survivors, many of whom had seen relatives and friends killed by twisters that obliterated whole communities, were camped out in the shattered shells of their homes or moved into shelters or with friends.

One disaster risk modeler, EQECAT, is forecasting insured property losses of between $2 billion and $5 billion from the havoc inflicted by the swarm of tornadoes that gouged through seven southern states this week.

"It is like living in some other world. Devastation is everywhere," said Pastor John Gates of the United Methodist Church in Pleasant Grove, Alabama, a community with a population of some 10,000 west of Birmingham.

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Full coverage of this week's tornadoes [ID:nN28284934]

Video link.reuters.com/mum39r

Graphic r.reuters.com/zap29r

Factbox on deadliest U.S. tornado days [ID:nN28269147]

Factbox on states hit by tornadoes [ID:nN29148979]

Factbox on tornado survival tips [ID:nN29161421]

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Alabama, the hardest-hit state, revised down its fatalities to 249 on Saturday after initially reporting 255 dead. At least 101 more deaths were reported in Mississippi, Tennessee, Arkansas, Georgia, Virginia and Louisiana.

Several thousand people were injured and hurt.

Stories of survival from the deadly twisters were still emerging but one report from a Jefferson County, Alabama emergency official of three people pulled alive from their wrecked home after three days turned out to be false.

The death toll, which is expected to rise, was the second highest inflicted by tornadoes in U.S. history. In 1925, 747 people were killed after twisters hit the U.S. Midwestern states of Missouri, Illinois and Indiana.

Unlocking federal assistance, Obama late on Friday signed major disaster declarations for Mississippi and Georgia, adding to the one already signed for Alabama.

Secretary of Homeland Security Janet Napolitano, Federal Emergency Management Agency Administrator Craig Fugate, Housing and Urban Development Secretary Shaun Donovan, Agriculture Secretary Tom Vilsack and Small Business Administration Administrator Karen Mills were all due to visit devastated areas in Alabama and Mississippi on Sunday, FEMA said.

TORNADO HIT LIKE "EXPLOSION"

Obama, mindful of criticism that President George W. Bush was too slow to respond to the 2005 Katrina catastrophe, visited the wrecked city of Tuscaloosa, Alabama, on Friday to pledge full federal assistance for states hit. [ID:nN29141004]

In many devastated communities, scenes of tangled piles of rubble, timber, vehicles and personal possessions recalled the destruction seen in the recent Japanese earthquake and tsunami. Power and water still were out in many areas.

In the small Alabama community of Phil Campbell, which lost 28 residents, Travis Roberts, 64, credited his wife Brenda's fear of storms for saving their lives. When they bought their property 35 years ago, he built a storm cellar for $600.

He invited seven of his neighbors to join them in the cellar when the twister hit but they chose to ride it out in their homes. Now five are dead and two critically injured.

"It wasn't wind, it was an explosion," Travis said at his shattered home as he received help from volunteers.

"It's not an exaggeration to say that whole communities were wiped out," Yasamie August, spokeswoman for the Alabama Emergency Management Agency, told Reuters.

Officials said even solidly built brick houses had been unable to withstand the force of some of the twisters.

The winds of one in Smithville, Mississippi, was recorded reaching 205 miles (328 km) per hour. It was a rare EF-5 tornado, the highest rating on the Enhanced Fujita scale that measures tornado intensity.

"When you are talking about an EF-5 level tornado there is no place that is safe really," said Jeff Rent of the Mississippi Emergency Management Agency. "That kind of tornado sucks up the grass and concrete."

Many whose homes only lost roofs and windows were camping inside with tarps and plastic sheeting over them but those whose houses were completely razed were forced to move in with family or friends or go into government shelters.

There were 659 people in shelters across Alabama, August said. Tennessee had 233 people in shelters.

Volunteers in many communities turned out to help. "Big grills are set up everywhere to offer people food. The community has really pulled together," said Tammy Straate, 29, a Pleasant Grove foster mother who cares for 11 children.

Tornadoes are a regular feature of life in the U.S. South and Midwest but rarely are they so devastating.

Recovery could cost billions of dollars and even with federal disaster aid it could complicate efforts by affected states to bounce back from recession. [ID:nN29159681] (Additional reporting by Colleen Jenkins in St. Petersburg, Peggy Gargis in Birmingham, Leigh Coleman in Mississippi, Pascal Fletcher in Miami, Writing by Pascal Fletcher; Editing by Bill Trott)