Roberta Murphy - San Diego’s Blog

Carlsbad, CA–It appears owners of San Diego real estate–and those who remodeled their homes in 2003-2005--may have been spared the corrosive and noxious results that can stem from certain Chinese drywall products. 

No so for unfortunate home buyers and owners in other parts of the country--especially Florida, Georgia and other Southeastern states.

Most of the sulphur-laden Chinese drywall was shipped in 2004-2005 to Hurricane Katrina-ravaged states that were trying to repair and rebuild their storm damaged homes.

Florida, Goergia, Louisiana and other states battered by Hurricane Katrina are facing a secondary assault– this time from poisonous Chinese drywall that was imported to help bolster supplies needed for repair and construction of homes damaged by the hurricane. It was also apparently used during the building boom that exploded across the country during the early and mid-2000’s.

But what about San Diego real estate and the homes constructed during the building boom?

It appears San Diego homes may have dodged the sulphur bullet.

Even so, how can you tell if you have toxic Chinese drywall in your home or business?

• Use your nose. If you smell rotten eggs (other than the real thing), you may want to investigate further.
• If you can, crawl into the attic or into some other accessible area to look at the underside of your drywall. If you see “Made in Chine” or “KNAUF” you’ll know your walls were made in China; however, that doesn’t necessarily mean they are toxic. Not all are. On the other hand, some Chinese drywall has no markings at all.
• Check for blackened copper pipes, air conditioning coils and electrical wiring. The sulphur reacts with copper, turning it black. A quick test is to remove the faceplate from an electrical outlet and look for blackened wiring–but do not touch!

It is selfishly good to know that San Diego should remain relatively unscathed by this dangerous Chinese import that is leaving homes vacated in other parts of the country. At the same time, this health and product crisis should serve as warning to all to investigate foreign products thoroughly before shipping them to the United States.

Our nation's mortgage meltdown has resulted in many stressed and relocating homeowners wondering what to do. Some are able to renogiate the terms of their mortgage with their lenders, while others are helplessly under water.

They are left to wonder:

Is it simpler to just let the home go to foreclosure?

Perhaps the lender will accept a deed in lieu of foreclosure?


Or should they go through the uncertainties and aggravation of a short sale?

Fannie Mae’s recent announcement seems to provide some real clarity for owners of homes in default.

After studying the announcement, we can only conclude:  Avoid foreclosures, bankruptcy and deed in lieu of foreclosure if at all possible. It is far, far better to have a short sale–or a pre-foreclosure sale–as a resolution.

Why?

Under the Fannie Mae Announcement 08-16 (released 06/26/2008), short sales or those engaging in pre-foreclosure sales will be cleared to borrow on another home via Fannie Mae in just two years from completion date of the short sale.

This may be painful, but two years is far preferable to the alternative of 5 to 7 years if the home goes to foreclosure and 4 to 7 years if one opts for deed in lieu of foreclosure.

Please distance yourself from anyone advising that there is no difference between a short sale and foreclosure–or that a deed in lieu of foreclosure may be preferable to either.

If homeowners were to follow this disastrous advice, our country’s real estate market would remain in the troughs for at least another five years–and by that time we might have gone through an economic depression of epic proportions.

If your home is in default,  contact a qualified short sale specialist as soon as possible to help avoid the long-lasting consequences of foreclosure. The best buyer for your home may a cash buyer who is in a position to perform on short notice–at no cost to you.

There is even the possibility that your agent and negotiators may be able to get the lenders to drastically reduce or eliminate potential deficiency judgments.

We work with such a buyer–and are willing to forfeit any real estate commission on the sale to this investor group, because they will eventually turn around and list with us. An agent in your area may be willing to do the same.

Wherever you live, it is imperative that you act immediately if you are in danger of losing your home.  If you let it go to foreclosure, you could be throwing away buying opportunities for the next five or so years.