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?
Thank you for reading! Your comments and questions are welcomed below.
The real issue was the people putting this stuff up. I would not buy it, it stunk when it was new, you gagged if you cut it and it did not take a genius to figure out much of it was not suitable to build with.
As for Freddie, just more typical window dressing that is touted as a great deal for the American people. Gutting a house to resheet, paint, trim the inside cost more than three months rent! Not to mention all the metal pipe and hardware on some. These are often houses to walk away from, some I have seen the only thing to salvage was the wood in the walls and then some had enough damage to the nails to make one question the structural strength after rebuilding it.
Thank you China, but I guess the government has to be nice or they won’t loan us any more money!
A few months or even a year is not going to solve the problem. Done correctly this ia a very expensive proposition. If you don’t do it correctly, you are just wasting more money. Even if the average person had the $30,000 to $50,000 to repair the average home the RIGHT WAY, they would probably be hesitant because of the stigma that will attach to the home in perpetuity. There are some schools of thought that recommend demolition as the only real solution. Even then the handling of the hazardous waste is costly.
Until there is a valid and tested solution that can be implemented by certified, competent and honest contractors there will be a requirement to disclose that the building was once contaminated with hazardous drywall. It is a liability from this day forward unless is can be definitively signed off.
I would not buy one because of this. I do believe that I can correct a house with it, but it would require a complete gutting and a complete chemical wash.
As far as I can see, the only true way is to have a remediation plan that is sanctioned by the building community, the medical community and the insurance community. The process needs to have complete inspections for compliance. Until the remediation can be comprehensively insured against all future related claims (equipment failure, system compromise and medical issues) I would suggest that it is a fools game to bet on. I know of one contractor who has done a thorough enough job that he is willing to live in it with his family. He has followed and exceeded all current recommendations and I think he may have figured it out.
Other than that, it is a waste of money to expect three months of forebearance to put a dent in this. Front the money to fix it for qualified homeowners or modify or work something out, but get the medical liability signed off………..
Just my opinion, but you won’t find my family living in one.
If I’m underwater on my home and I’m looking at 50K to gut it to get rid of this crap and still have no way to assure that I can sell the house in the future becasue of the need to disclose this problem, why would I do anything other than walk away from it? This is not a problem any government program will fix. The builders who used this crap are probably bankrupt in many cases already so the buyer has no recourse there. As I have heard from some folks in FL, get a good insurance policy and hope for a hurricane or fire to solve your problem.
This reminds me of loan modifications. Perhaps well intended but more often useless. The drywall problem is only masked but doesn’t go away.. The only solution is to tear it out and replace. Can that be done with a few months mortgage payments? Everything is possible but highly unlikely. This is throwing good money after bad one. Oh well, the wisdom of our government is to make us feel better, not cure a problem.
This is typical Gov’t Stupidity….
The Mold was so bad in my Florida house that I couldn’t even
stand to live there….
The Builder just removed the Drywall off and put it out in the Sun for a few days and slapped it right back on the Wall….
I got a 6 Months Extended Warranty on it to sell it off to a sucker connected to the Builder….that put “Upgrades” and then sold it
off to another Sucker…
WHO WON? The BUILDER
THE GOVERNMENT’S SOLUTION: A Short Term Solution that doesn’t
even WORK….