Home Has Chinese Drywall - Walk Away From Mortgage?

[ShaneTheMaster]

Recently I found out my townhome has chinese drywall. I paid $185,000 for the home roughly 2 years ago, and the assessed value since then has dropped to $135,000. (This was before chinese drywall was discovered in it). The builder is not willing to fix it obviously, as it would cost roughly $70,000 to repair it. I have pending litigation with the drywall manufacturer, but there is no end in sight.

My whole building has it, and I think this will further dwindle the home's value even after I get it fixed.

Multiple people have told me I should just walk away from the mortgage, and take the hit to my credit for the next 7-8 years. Anyone have experience with doing this? I really don't know what to do, as they have may have health risks involved with the defective drywall, and I can't afford to pay 2 mortgages.

Any help is appreciated.

[Flasch186]

Shane,

As a lic. Realtor in Florida I highly, HIGHLY recommend talking to an experienced local Realtor AND a Lawyer. You should put together a good team of people to advise you in this. You can call me anytime but being up here I wont be much help in person.

Howard

[cougarfreak]

Chinese drywall attorney> Chinese drywall lawyer> Chinese drywall lawsuit | Chinese Drywall Problem

[ShaneTheMaster]

Thanks for the help. I already have a lawyer for the drywall situation, just trying to figure out if its worth the hassle.

[RomaGoth]

Originally Posted by ShaneTheMaster

Thanks for the help. I already have a lawyer for the drywall situation, just trying to figure out if its worth the hassle.

I can't speak from experience with this particular situation, but I would guess that foreclosure should be your absolute last option. You already took a beating on the home value (as did most of the country), I would recommend you at least listen to what a lawyer has to say before doing anything.

Good luck in any case.

[RomaGoth]

Dola

Check out this link, it might offer you some insight. *shrug*

[ShaneTheMaster]

Checked with a foreclosure attorney, and in the state of Florida, the bank can go after me for the difference of loan balance, and what they get from the sale of the home - which is a problem. The home is pretty worthless with the chinese drywall, and I owe $185,000.

The only other alternative is bankrupcy. Anyone familiar with that? Don't they take over all your possessions when you do that?

[Butter]

I did not even know Chinese Drywall was a thing. I am sorry you are going through this.

Also can't really give advice on bankruptcy now that the laws were changed under Bush Jr. I went through it nearly 10 years ago, but the laws were different then.

[CU Tiger]

You have homeowners insurance right?

[ShaneTheMaster]

Originally Posted by CU Tiger

You have homeowners insurance right?

Yes, but insurance companies are not accepting claims for the drywall - not only that - they are dropping people who have it! My attorney has advised me to not tell my insurance company anything about it.

[stevew]

Is there a way you can basically board up the townhouse and find an apartment? I wonder if it is worth it to keep up on the mortgage while the lawsuit is pending.

Can you sue your home inspector?

[ShaneTheMaster]

Originally Posted by stevew

Is there a way you can basically board up the townhouse and find an apartment? I wonder if it is worth it to keep up on the mortgage while the lawsuit is pending.

Can you sue your home inspector?

Home inspector or builder? I have a lawyer, and everyone in the building pipeline from the builders, contractors to the manufacturers are listed as defendants. The manufacturers of the drywall is where the money is at, so that is where the lawyers are focused. One of the chinese manufacturers recently settled out of court (Knauf), but not mine (Taihi).

The bank is giving forebearances up to 3 months, and will do a review every 3 months, but the total payments missed will be due as soon as the forebearance is over. They then said they can do a loan modification, probably by extending the life of the loan.

[FrogMan]

Originally Posted by Butter_of_69

I did not even know Chinese Drywall was a thing. I am sorry you are going through this.

Same here, had never heard of this Chinese Drywall thing. Reminds me of the Urea Formaldehyde foam scandal there was in the 70's. That foam was used to insulate home and led to many people getting sick and whole houses having to have their wall either be torn down to be rebuilt, or whole houses having to be put to the ground...

Don't know if it made the news in the States, but it was a big deal in Quebec, especially since the Government had approved it or something like that.

FM

[fantom1979]

Kinda of surprised that there are some people that had never heard of this. It was a pretty big story here in the states a couple of months ago. It was all over the big 3 cable news networks. It typical fashion though, the news story went away but the problem and those suffering from it still exist.

[Butter]

Originally Posted by fantom1979

Kinda of surprised that there are some people that had never heard of this. It was a pretty big story here in the states a couple of months ago. It was all over the big 3 cable news networks. It typical fashion though, the news story went away but the problem and those suffering from it still exist.

Don't watch the news much, so that explains it.

[Flasch186]

Originally Posted by fantom1979

Kinda of surprised that there are some people that had never heard of this. It was a pretty big story here in the states a couple of months ago. It was all over the big 3 cable news networks. It typical fashion though, the news story went away but the problem and those suffering from it still exist.

Are you talking about Haiti?

[QuikSand]

Originally Posted by fantom1979

Kinda of surprised that there are some people that had never heard of this. It was a pretty big story here in the states a couple of months ago. It was all over the big 3 cable news networks. It typical fashion though, the news story went away but the problem and those suffering from it still exist.

When we started looking for houses (in Maryland) a couple of years ago, we were well aware that Chinese drywall was a pretty serious problem, and we were pretty well armed with the type of buildings that were at least candidates to house it. We got to the "home inspection" stage with a couple different units, neither of which were good candidates, but we still pressed for confirmation from our home inspectors.

This sort of information -- that the presence of this material may be a poorly-reported facet of a home that could undermine its future value -- seems to be the sort of thing that clients ought to be able to count on their "real estate professionals" to look out for, but to be blunt the real estate profession is just so densely loaded with hacks and idiots that it comes as no surprise that many customers come away with bad guidance (and that's being a generous).

[Silver Owl]

Wow, we are in the final stages of buying a house and I have never heard of Chinese drywall. I should probably have this checked out.

[Ajaxab]

Originally Posted by QuikSand

This sort of information -- that the presence of this material may be a poorly-reported facet of a home that could undermine its future value -- seems to be the sort of thing that clients ought to be able to count on their "real estate professionals" to look out for, but to be blunt the real estate profession is just so densely loaded with hacks and idiots that it comes as no surprise that many customers come away with bad guidance (and that's being a generous).

Why is it that two of the most important purchases in life, buying a home and buying a car, are often guided by people who have little education beyond high school? Doesn't make a whole lot of sense...

[RomaGoth]

Originally Posted by Ajaxab

Why is it that two of the most important purchases in life, buying a home and buying a car, are often guided by people who have little education beyond high school? Doesn't make a whole lot of sense...

I have found that being able to sell something doesn't require a whole of smarts, it really is just about personality. We are very careful with whom we do business with when buying a home or a car, but it doesn't hurt to do some research yourself in addition to what the real estate agent/car salesman is telling you.

[CU Tiger]

Originally Posted by ShaneTheMaster

Yes, but insurance companies are not accepting claims for the drywall - not only that - they are dropping people who have it! My attorney has advised me to not tell my insurance company anything about it.

I might live dangerously....candles all over the place...
Over load electrical circuits...
Etc.

[Tekneek]

At first glance, the deck seems to be stacked in the favor of the bad guys on this. They have the luxury of stalling and playing for time, while you have everything to lose in the meantime. What a bad situation to be in. I am sorry it is happening to you.

As far as I am concerned, this is another example of why I'm not a Libertarian anymore. We need better protection from this kind of stuff, not a solution that says get an attorney and hope for the best.