No end to Chinese drywall woes
Property owners have no choice but wait until lawsuits wend their way through court system
SOURCE: Florida Department of Health
The Chinese drywall problemFlorida has had the largest number of reports of defective Chinese drywall in the United States. The map shows the number of complaints received by the Florida Department of Health from each county, through Jan. 18. A recent investigation by ProPublica indicates that the number of complaints to various agencies may seriously underrepresent the scope of the problem.
Published: February 17, 2011
"Banks are now foreclosing on the second cycle of homes," says Chinese Drywall Recovery's Campbell. "It's crazy. In a couple of years, I think we're really going to see this problem mushroom before it's done."
The defective products have not been recalled - the CPSC's line on a recall is that it "cannot order someone to conduct a recall without a trial," per a statement on its Drywall Information Center website, because its efforts must be driven by "scientific proof" that the drywall causes health or safety issues - and there is no rule requiring people to remediate drywall-affected properties before selling them. Instead, Campbell says, lenders may have purchasers sign disclosure forms indicating that they've been made aware that tainted drywall could exist in the property they've purchased. Some of these properties have been foreclosed upon due to drywall problems in the first place.
Campbell, who says she learned of Chinese drywall when several homes she and her husband own in Slidell, La., were found to contain it, is trying to get banks and legislators to work with her company to broker forbearance deals for mortgagees whose homes are affected by the tainted product. Since homes found to have it require complete gutting - Housing and Urban Development remediation guidelines call for replacement of all drywall, electrical wiring and components, gas piping and fire-safety equipment, not to mention appliances or metals corroded by the sulfuric gases the drywall emits - experts say it can cost $100,000 to properly remediate the average home. And Campbell and others say that quick fixes don't do the trick because the gases penetrate porous surfaces and corrode metallic ones; any gases that have settled in the home can continue to create problems. Because they can't afford to repair the homes and they can't live in them, some people go into foreclosure or walk away from affected homes. Since the homes are worth little due to the cost of remediation, banks then sell them cheap.
"The banks don't have any direct recourse because they are not the homeowner and they can't sue anybody," Campbell says. "They have to sit there and wait for the homeowner to recoup something, or it's a straight-out loss for them. So what they're doing is ignoring the problem and putting homes back on the market."
If a homebuyer is lucky, he or she may receive a disclosure letting them know that toxic drywall may be present and need remediation. If not, they may find out the hard way and start the cycle all over again. Some real estate investors are purchasing the properties in some states, fixing them up on the cheap, then renting or reselling them.
"There's a website of a guy who is specifically looking for homes with Chinese drywall to fix and resell," she says. "It's not good, and I don't understand why politicians aren't a bit more on the ball with this."
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