February, 2010
News in Brief
Inspection News and Views from the American Society of Home Inspectors

Drywall Update from Washington


The drywall issue continues to develop and have impacts throughout home sales businesses. The potential broad economic impact could be enormous.

The following is an early January release from HUD regarding a possible source of funding for FHA-insured homeowners to remediate.

The U.S. Department of Housing and Urban Development has announced that FHA-insured families experiencing problems associated with problem drywall may be eligible for assistance to help them rehabilitate their properties. In addition, HUD’s Community Development Block Grant (CDBG) Program may also be a resource to help local communities combat the problem.

The FHA is reminding its approved lenders that they are to offer special forbearance for borrowers confronted with the sudden effects of damaging drywall products in their homes including the financial hardship associated with related home repairs.

“We’re instructing our FHA mortgage lenders nationwide to extend temporary relief to allow these families time to remove problem damaging drywall and repair their homes,” said FHA Commissioner David Stevens. “We want to remove additional pressures for these families as they find solutions to allow them to return to a safe, decent and sanitary home.”

FHA Type 1 Special Forbearance (noted in Mortgagee Letter 2002-17) is available at: www.hud.gov/offices/adm/hudclips/letters/mortgagee/2002ml.cfm. The Word document found here: www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/ml02-17.doc provides relief that is not typically available under an informal forbearance or repayment plan. The relief provided can include one or more of the following:
  • suspension or reduction of payments for a period sufficient to allow the borrower to recover from the cause of default;
  • a period during which the borrower is required to make only their regular monthly mortgage payment before beginning to repay the arrearage; or
  • a repayment period of at least six months.
HUD is instructing lenders that no late fees are to be assessed while the borrower is making timely payments under the terms of the Special Forbearance plan. The total arrearage for a Type 1 Special Forbearance cannot exceed 12 months of delinquent payments. Lenders can review borrower applications and make a determination as to the most appropriate loss mitigation tool, including loan modification, partial claim or FHA HAMP. Any questions or clari-fication regarding the Type 1 Special Forbearance should be directed to the HUD National Servicing Center at 888-297-8685.

New Info on Chinese Drywall

Homeowners continue to look for answers about Chinese drywall. How can  they tell if it’s in their house? Is it a threat to their home? To their health?

On November 23, 2009, the U.S. Consumer Product Safety Commission published the results from a major indoor air study of 51 homes. It is available (www.cpsc.gov/info/drywall/index.html)as a PDF here.

There are also links to CDC Fact Sheets for consumers that can be copied and distributed to clients.

Citing government sources may be prudent until more facts are available. The Floridashealth.com Web site advises consumers to beware of bogus tests, inspections and fixes for damaged drywall, and the Federal Trade Commission issued a consumer alert, “Don’t Get Nailed by Bogus Tests and Treatments.”

Here's a link to the July 2009 Reporter article “Florida Inspector Shares Chinese Drywall Challenges.”