Monday, June 20, 2011

Chinese Drywall Becoming a HUGE and Costly Problem

I have been working on many short sales, Deeds in Lieu (DIL) and foreclosure defenses in Florida. I recently encountered an almost brand new home that contained “Chinese drywall”. We received an estimate to replace the toxic drywall with new drywall and the price exceeded $100,000! This is a huge problem that is not receiving a lot of media coverage. Perhaps because the affected (infected) areas are mostly Florida, Alabama, Mississippi, Louisiana, Virginia and Southeast Texas homes.

As hard as it may be to believe, there is actually a Chinese Drywall Complaint Center (CDCC) and they are now claiming that Fannie Mae and other lenders are “dumping toxic Chinese drywall home foreclosures on completely innocent or unknowing U.S. home buyers,” the Chinese Drywall Complaint Center (CDCC) alleges that the foreclosure crisis will just “get worse” if as-is foreclosures are not controlled. CDCC also accuses lenders of “securities fraud on a massive scale.” The CDCC believes that the Chinese drywall will appear in other areas of the country as well.
Chinese drywall is an imported drywall that was used in some U.S. homes between 2003 and 2008. The drywall appears to cause problematic symptoms in home inhabitants like irritated, itchy eyes and skin, difficulty breathing and premature cough and headaches. The drywall also causes premature deterioration of metal components like air conditioner coils and electrical wiring. Currently, the federal government has no approved method of remediation for the situation and many homeowners have opted to move or have all of the drywall removed (a complete renovation) in order to deal with the problem.
It seems likely that lenders would argue that dealing with problem aspects of a property like Chinese drywall is an inherent part of buying a property as-is, and the CDCC does not necessarily disagree. They allege that there is not adequate awareness of the issue out there and that it makes selling as-is foreclosures in drywall-“infected” areas a fraudulent process. Great huh?? LOL

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