In an economic climate all ready in recession where the housing market has almost completely bottomed out, other threats and concerns with Chinese drywall center around the pocket book.
Many homeowners affected by the Chinese drywall are in the middle of bankruptcy proceedings. Life savings have been depleted in hopes of repairing the homes and appliances. After becoming sick, they leave the homes and then have to pay out not only the mortgage on the house with the Chinese drywall but also whatever rent they have to pay for their back-up living quarters.
Homeowners have a real fear of bankruptcy and foreclosure.
Most statements to the media from banks suggest homeowners can request forbearance solutions or the homes can be placed in a nonaccrual state where monthly mortgage payments do not need to be paid. Most forbearance solutions typically last three months or so, then the account must be reexamined. Banks such as the Citizens National have, in the past, reported home owners to the credit bureaus when a mortgage is in a nonaccrual state though, and have even sent inspectors to the properties in question.
The problems associated with Chinese drywall have also affected the real estate market.
“Buyers are scared. They’ve heard about it, but nobody knows where all these homes really are, so it’s leaving a question in people’s minds: Is this one of the homes?” said Keller Williams real estate agent Kathy Marlowe of Lakewood Ranch, Florida.
- Brown, Josh. “Families face ruin dealing with Chinese drywall,” The Virginian-Pilot. PilotOnline.com at http://hamptonroads.com/2009/10/families-face-ruin-dealing- chinese-drywall, October 29, 2009. Accessed December 27, 2009
- Kessler, Aaron. “Chinese drywall burdens market: Uncertainty is making some buyers nervous, agents say,” Herald Tribune.com at http://www.heraldtribune.com/article/20090313/ARTICLE/903130286/0/BLOG8 402, Friday march 13, 2009. Accessed December 28, 2009