Freddie Mac has instructed its loan servicers that they can give borrowers with Chinese drywall suspended payments for 3 months or reduced payments for 6 months to help them resolve the problems with their homes. The drywall, which causes a foul odor, corrodes pipes and is generally unpleasant and unhealthy – it can cause headaches and difficulty breathing – requires decontamination and replacement in order to resolve the issue. In most cases, all drywall needs to be removed and replaced in the home, along with metal pipes, appliances and even hardware like doorknobs in some cases because the construction material is so corrosive.
Under the new guidelines, servicers dealing with particularly problematic cases can even recommend that forbearance extend for 12 months if the repairs are particularly arduous or dramatic. However, servicers do not have to give forbearance; they simply have the option. Some real estate investors and home builders – many of whom have spent or lost millions on homes containing this toxic stuff – state that Freddie Mac’s forbearance efforts are not nearly significant enough to help most homeowners or other borrowers trying to resolve issues with this construction material.
Do you have personal experience with Chinese drywall? Do you think that Freddie Mac is handling the problem responsibly and appropriately?
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