Feds call Chinese makers responsible for tainted drywall
Chinese manufacturers are responsible for the high-sulfide drywall that is causing corrosion problems and health complaints in thousands of homes in Florida and other states, U.S. consumer officials said on Tuesday.
The Consumer Product Safety Commission released the names of Chinese companies that turned out drywall with high levels of hydrogen sulfide strongly associated with metal corrosion. The Commission essentially urged these companies to consider compensation for Americans.
“Homeowners who have problem drywall in their homes are suffering greatly,” said CPSC Chairwoman Inez Tenenbaum. “I appeal to these Chinese drywall companies to carefully examine their responsibilities to U.S. families who have been harmed and do what is fair and just.”
Of the drywall tested, the top 10 sulfur-emitting drywall samples were produced in China. Some had emission rates of hydrogen sulfide 100 times greater than non-Chinese drywall samples.
Here are the top ten:
Knauf Plasterboard (Tianjin) Co. Ltd.: (year of manufacture 2005) China
Taian Taishan Plasterboard Co. Ltd.: (2006) China
Shandong Taihe Dongxin Co.: (2005) China
Knauf Plasterboard (Tianjin) Co. Ltd.: (2006) China
Taian Taishan Plasterboard Co. Ltd.: (2006) China
Taian Taishan Plasterboard Co. Ltd.: (2006) China
Shandong Chenxiang GBM Co. Ltd. (C&K Gypsum Board): (2006) China
Beijing New Building Materials (BNBM): (2009) China
Taian Taishan Plasterboard Co. Ltd.: (2009) China
Shandong Taihe Dongxin Co.: (2009) China
Another threat looming for homeowners
http://www.sun-sentinel.com/business/fl-short-sale-debt-20100521,0,5016396.story
Analysts expect barrage of lender lawsuits to recoup mortgage debt. By Paul Owers, Sun Sentinel.
Before Larry Thomas unloaded his Pompano Beach home last fall for a fraction of what he paid, he cut a deal that will keep him from worrying about a huge debt hanging over his head.
Thomas insisted that his lender, American Home MortgageServicing, agree not to come after him for the estimated $174,000 he still owed on his two mortgages. “I feel incredible relief,” the 32-year-old restaurant manager said last week.
Others may not be as fortunate.
Lenders will file a tidal wave of lawsuits against homeowners in the next few years as a way to recoup losses when home sales or foreclosure auctions don’t result in enough money to pay the mortgages in full, real estate and legal analysts say.
“It will be a dramatic problem because the borrowers will not know it’s coming,” said Frank Alexander, a law professor at Emory University in Atlanta.
Under Florida law, banks have five years from the date of the sale to file for so-called deficiency judgments and up to 20 years to collect. Lenders can garnish wages or make claims on borrowers’ assets.
Before the housing meltdown, few lenders filed these lawsuits. Foreclosures and short sales — selling for less than the mortgage amount — were relatively rare at the time, and many of the homeowners didn’t have sufficient assets to make it worth the banks’ time and expense.
But following the heady days of the housing boom that spawned millionaire investors seemingly overnight, it’s not uncommon for borrowers to default on mortgages while still holding lucrative investments.
As the next wave of the housing crisis plays out, those most in danger of getting slapped with lawsuits include angry homeowners who ransack properties they’re losing in foreclosure and borrowers who walk away from “underwater” mortgages. In both cases, analysts say, banks will want to discourage other people from such behavior.
More than four in 10 homeowners said they would consider abandoning properties that are underwater, or worth less than the mortgages, according to a national online survey released last week by real estate firms Trulia and RealtyTrac.
Mortgage companies typically won’t sue homeowners who negotiate in good faith or those who default on their loans because of job losses or other unforeseen circumstances, said Anthony Manno, an executive with Steelbridge Real Estate Services. The Miami-based company works with lenders on the resale of foreclosed homes.
Still, borrowers shouldn’t rely on a lender’s verbal commitment, Manno said. “Get something in writing.”
Critics insist that spite will play a role in some of these lawsuits. Lenders deny it.
“We certainly would not do that,” said Russell Greene, president of Grand Bank & Trust of Florida in West Palm Beach. “It’s a business decision — not an emotional decision. It’s very time-consuming to take someone to court.”
Even if lenders don’t pursue the judgments, they could sell mortgage debt to collection agencies at deep discounts. And it will be those debt collectors that will hound borrowers, said Shari Olefson, a Fort Lauderdale real estate lawyer.
“They paid money to be able to hassle you,” she said.
Thomas, the former Pompano Beach homeowner, said he didn’t have money for a down payment but was approved for 100 percent financing on two loans in spring 2006. He bought a three-bedroom home for $245,000 near Copans Road and Dixie Highway.
Thomas said he soon became responsible for the entire mortgage after his roommate lost his job. That became even more difficult after Thomas took a pay cut.
So he attempted a short sale, eventually finding plenty of prospective buyers interested in a property that had plummeted nearly 70 percent in value. He and American Home Mortgage accepted one offer for $80,000. After closing costs, the lender netted about $71,000, said his Fort Lauderdale lawyer, Joe Kohn.
But before the sale closed, Kohn had American Home Mortgage waive its right to collect on the remaining mortgage debt.
Christine Sullivan, a spokeswoman for the lender, wrote in an e-mail that she can’t discuss Thomas’ case because of privacy issues. But when homeowners seeking short sales demonstrate legitimate hardship, “we provide a full release of liability, and we do not pursue deficiency judgments.”
Some banks say they won’t file a lawsuit, though they aren’t willing to put that in writing, Kohn said.
“I have no choice but to accept that,” he said. “Even when you play by the rules, banks don’t always do what we’d like.”
Under new government guidelines for short sales that took effect this spring, lenders aren’t supposed to hold homeowners responsible for any remaining mortgage debt. But not all short sales fall under the guidelines, while some lenders choose not to implement them, Kohn said.
A forgiven mortgage balance through 2012 is not considered taxable income on a primary residence as long as the debt was used to buy or improve the house. But borrowers who walk away from investment properties risk having to pay federal income taxes on the forgiven amount.
Homeowners who hand their properties back to the bank through so-called deeds in lieu of foreclosure also should make sure they won’t be on the hook for any mortgage debt.
With friends facing deficiency judgments, Thomas said he’s grateful he sought legal advice on how to avoid a lawsuit. He now rents a home west of Boca Raton, but he just found out the owner is in foreclosure.
“I’ve escaped my own problem, only to inherit someone else’s,” Thomas said. “But this is nothing. It’s just a matter of picking up the pieces and moving on to the next rental.”
Bullet found during roof inspection
This has become a not so uncommon thing to find during a roof inspection. This is a bullet lodged into the shingles. This is why it is important for your home inspector to walk the roof. If not repaired, this will eventually leak.
Posted by Bill Siegel Florida Home Inspection Team Inc.
Leaking dishwasher
Leaking dishwasher
This one was kind of easy to see. The dishwasher was leaking and has ruined the kitchen wood floor. Not only has it done that, but the entire wall behind the cabinet was wet and there was mold growth on the wall. Had this been corrected early on when it was first noticed, the repairs would have been minimal. Now, because the cabinets are going to need to be removed and because of the mold, the repairs will cost considerably more.
Posted by Bill Siegel Florida Home Inspection Team Inc.
Mortgage delinquencies, foreclosures and no end in sight
The housing debacle continues to set unwanted records, with more than 10 percent of U.S. homeowners missing at least one mortgage payment during the first quarter of 2010.
That’s from a Mortgage Bankers Association survey released Wednesday. The percentage of loans in the process of foreclosure rose to 4.63 percent, another high mark.
The economy is generating jobs, helping to reduce layoffs, Jay Brinkman, MBA’s chief economist, said in a statement. But new unemployment insurance claims remained higher than expected in the first quarter.
“For several years, the four states of Florida, Arizona, Nevada and California have dominated the national delinquency and foreclosure numbers,” Brinkman said. “Florida is still getting worse, but California is showing signs of improvement. However, Washington, Maryland, Oregon, and Georgia showed the greatest overall increases in foreclosures started compared to last quarter.”
Knauf, Beazer settle over Chinese drywall
Looks like Knauf is about to start settling some of these claims.
Knauf Plasterboard Tianjin has been in discussions with builders in recent weeks, seeking “a reasonable solution to repair homes built with KPT drywall.
One of the largest makers of high-sulfur Chinese drywall has announced a settlement with Atlanta-based homebuilder Beazer Homes.
Knauf Plasterboard Tianjin, a German-owned company based in China, said it has been in discussions with builders in recent weeks, seeking “a reasonable solution to repair homes built with KPT drywall.”
The company’s talks have been ongoing since a federal judge ruled that homes must be gutted of the problem drywall in April. Knauf has said it believes less costly solutions are possible.
“In an effort to assist with Chinese drywall remediation efforts, Knauf Plasterboard Tianjin (KPT) has reached a joint settlement with Beazer Homes that used KPT drywall to construct some of its homes in Florida,” Knauf said in an e-mailed statement attributed to attorney Don Hayden of Baker & McKenzie.
Beazer’s Web site says it has projects in metropolitan areas near Panama City, Tallahassee, Jacksonville, Tampa and Orlando.
Hayden said more details about the settlement will be forthcoming, but the company has not yet disclosed the settlement terms.
“The settlement with Beazer is part of KPT’s effort to get this issue behind them and move forward. It shows that a solution is possible when there is agreement on reasonable repair costs,” Hayden said in the statement.
On April 28, a federal judge ordered Knauf to pay the Hernandez family of New Orleans $164,049 for damages related to contaminated drywall in their home, including $136,940 to gut and restore the home. The total award represents $81 a square foot.
Miami-based Lennar Corp. has sued KPT over drywall problems. On Monday, a spokesman for Lennar declined to reveal whether the company was negotiating with KPT.
Chinese drywall has concentrations of sulfur and other substances that produce corrosive gases and odor. The biggest problems are corrosion in air conditioners and electric wiring.
From 2004 to 2006, when the building boom and hurricane repair created a domestic shortage, 500 million pounds of drywall were imported, with 60 percent coming through Florida ports.
Chinese drywall risks
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Posted by Bill Siegel Florida Home Inspection Team Inc.