Posts Tagged ‘ Banks ’

Chinese Drywall: Now Finger’s Pointing at Banks

November 10th, 2010. By LucyC

Well, it seems like the perfect storm has arrived on the doorsteps of American banks. For quite some time the pressure has been building around banking practices, specifically due diligence on foreclosures, which has recently resulted in a rash of class action lawsuits in various states across the country (see above chart for the breakdown of Chinese drywall reported incidents by state), as well as investigations by Attorneys General in several states. And there will likely be more to come. Now, in a bizarre twist of fate, it seems the Chinese drywall debacle has been added to the foreclosure mess. And what a witches brew it is. 

This week, the Chinese Drywall Complaint Center (CDCC)—a national watchdog group—has issued a press release stating that “we are now targeting greedy US banks, for reselling toxic Chinese drywall foreclosures in Florida, and other US States, without an oh by the way—anytime after February of 2009.” They go on to state that “by March of 2009 we do not think there was a single US bank, or loan servicer that was unaware of the toxic Chinese drywall disaster—yet they continued to sell their poisonous foreclosures AS IS—no disclosure of this toxic Chinese drywall product to unsuspecting US consumers?” And, “For clarification purposes the Chinese Drywall Complaint Center is saying, “contrary to homebuilder claims about only using toxic Chinese drywall after Hurricane Katrina in August of 2005—toxic Chinese drywall has been used in Florida since as early as 2001.” 

According to the CDCC website, the organization has “now determined with 100% certainty, that imported toxic Chinese drywall has been installed all over the US Southeast including the states of Florida, Louisiana, Virginia, Mississippi, Alabama, Southeast Texas, Virginia, Georgia, and South Carolina. Tragically, we believe toxic Chinese drywall has also been installed in all other regions of the United States. However, without high thresholds of heat & humidity, it becomes much more difficult to see the worst effects of toxic Chinese drywall.” 

And, they also state that “many homes in the US Southeast have toxic Chinese drywall intermixed with US made drywall. If these homes were built or remodeled after 2001, we believe a small amount of imported Chinese drywall is enough to make an entire house toxic. The net result is [that] instead of ending up with tens of thousands of now toxic US Southeast homes, we are convinced we have 100,000’s of toxic US Southeast homes.” 

It’s highly likely that people have purchased foreclosures that contain Chinese drywall. Thinking about who might be liable, though, actually makes my head spin: purchasers need due diligence such as home inspections; and lenders like to make sure the property is in good nick before they finance the mortgage; but then if it’s a foreclosure, wouldn’t the bank selling the house have to disclose that it was contaminated with Chinese drywall—provided they knew? And for that matter, does anyone have to disclose that a house is contaminated with Chinese drywall? These and many more questions come to mind. For my money, finding the answers would definitely be best left to lawyers. 

But—deep in the midst of the Chinese Drywall hurricane there is some good news. Recently, Chinese drywall manufacturer Knauf Plasterboard Tianjin Company agreed to pay to repair 300 homes in Florida, Louisiana, Alabama and Mississippi in a pilot remediation program. Reportedly, a Louisiana-based supplier and several home builders and insurers are contributing to the cost of the repairs. More than 3,000 claims are supposedly pending against Knauf. Let’s hope it goes well, because if it does the program might provide a framework for a larger settlement, which no doubt would be welcome.

Tags: Banks, chinese drywall, Foreclosures
Posted in Defective Products, Financial | No Comments »

Debit Card Overdraft Fees – An Update

November 30th, 2009. By LucyC

First the good news—maybe—on November 12, the Federal Reserve announced that new rules governing the seemingly rampant application of overdraft fees linked to debit card use would be initiated. Now the bad news—maybe—the rules don’t come into effect until next summer—July 1^st, 2010 apparently. 

The development of these rules is a direct result of loud consumer reaction to the banks’ deceptive and abusive consumer lending practices.  

Of course the argument that the rules will provide any real benefit at all has just begun. More on that in a minute. 

So what protection will the new rules offer you? Here’s the scoop—straight from the Federal Reserve website: 

The final rules would “…prohibit financial institutions from charging consumers fees for paying overdrafts on automated teller machine (ATM) and one-time debit card transactions, unless a consumer consents, or opts in, to the overdraft service for those types of transactions. 

Before opting in, the consumer must be provided a notice that explains the financial institution’s Read the rest of this entry »

Tags: Banks, Debit Cards, Overdraft fees
Posted in Financial | No Comments »