Help is on the way for some Chinese drywall homeowners from the Department of Housing and Urban Development (HUD). According to the agency, it is instructing Federal Housing Administration (FHA)- approved lenders to offer temporary help to Chinese drywall victims, and allowing municipalities to use Community Development Block Grant funds to help remediate homes with […]
Help is on the way for some Chinese drywall homeowners from the Department of Housing and Urban Development (HUD). According to the agency, it is instructing Federal Housing Administration (FHA)- approved lenders to offer temporary help to Chinese drywall victims, and allowing municipalities to use Community Development Block Grant funds to help remediate homes with the defective wallboard.
So far, the Consumer Products Safety Commission (CPSC) has received 2,360 reports from residents in 35 states, the District of Columbia, and Puerto Rico concerning Chinese drywall. The drywall problems have forced many people out of their homes, and some families are dealing with the heavy financial burden of paying both rent and mortgage payments. Those unable to afford additional rent have no choice but to stay in their potentially hazardous homes. Homeowners insurance does not cover damage from Chinese drywall, and builders have estimated that remediating a home with Chinese drywall could cost as much as $100,000.
According to a HUD press release, 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. Lenders also are being encouraged not to charge late fees and to give the homeowners time to make up past-due payments.
Though this aid is only available to homeowners whose mortgages are FHA- insured and who may qualify for help under an existing mortgage-forbearance program intended to prevent foreclosures, a report in The Wall Street Journal said that HUD’s decision may prompt other mortgage lenders to follow suit.
HUD is also making Community Development Block Grant funds available help states and local communities to address the rehabilitation expenses associated with problem drywall. According to the agency’s press release, all activities funded through the Community Development Block Grant program must meet one of the its three national objectives: Provide benefit to low- and moderate-income persons; Eliminate slums or blighting conditions; or address an immediate threat to the health or welfare of the community.
For questions on mortgage forbearance terms, Chinese drywall homeowners may call HUD at (888) 297-8685.
