Three United States senators have asked Fannie Mae and Freddie Mac to provide a six-month mortgage hiatus to Louisiana and Florida homeowners dealing with Chinese drywall, according to the Sarasota Herald Tribune. Chinese drywall can release fumes that are very corrosive and damages wiring, plumping and other metal components in the home. There is concern about the health effects of exposure to these fumes as well.
Last week, Fannie Mae announced that it would provide such mortgage relief to Virginia homeowners based on a request from Senator Mark Warner (D-Va.). According to the South Florida Sun-Sentinel’s blog, Fannie Mae has also said that it will provide the same six-month mortgage relief to seven families who received a judgment from a federal court last week concerning their Chinese drywall claims. See related story. Now Senators Bill Nelson (D-Fl.), George LeMieux (R-Fl.) and Mary Landrieu (D-La.) have asked Fannie Mae and Freddie Mac to provide the same assistance to residents of Florida and Louisiana.
Homeowners want and need to vacate homes that still contain corrosive Chinese drywall, but without some time of relief, they can’t afford to pay rent, pay their mortgage, and pay for remediation—which insurance companies have so far refused to cover.
Baron & Budd attorney Burton LeBlanc recently testified before the Louisiana Senate Insurance Committee that highlighted the Catch 22 faced by homeowners who are living with Chinese drywall. See related story. Finding Chinese drywall in the home can initiate a chain reaction that threatens to rob people of their homes entirely.
According to the testimony before the committee, insurance companies have uniformly denied coverage and, in some cases, failed to renew insurance policies where Chinese drywall remains in the home because the home is considered uninhabitable. But if the homowner moves out and funds remediation on their own—a course most homeowners cannot afford—their insurance policies would be subject to cancellation because the home would be vacant for more than 30 days, and occupancy is a condition of homeowner policies. If these homeowners lose their insurance policies, they cannot get other policies. They will be in default on their mortgage, making them subject to losing their homes altogether.
See one family’s story of how Chinese drywall has affected them.
