Bank foreclosing on woman's Chinese drywall home

First, toxic drywall imported from China ruined Claudia Woods' brand new home. And now, her lender wants to foreclose on the house anyway.

"I'm sitting here, rotting in a house, and they still want to collect mortgage," Woods said.

Corrosive gas from the drywall caused her washing machine to malfunction and overflow, causing her ceiling to cave in.

The Hillsborough County Property Appraiser's Office says the house is now worth about $5,000. Even so, Woods wants to pay what she owes on her loan. She doesn't want her credit ruined, too.

She fell behind on three payments because of health problems to her and her children. Rashes and respiratory problems were caused, she said, by the drywall.

She sent what she owes to the lender last month. But Flagstar Mortgage returned the checks.

"I want to pay," Woods said. "I'm not trying to get out of my business. They won't take my money."

Bradley Howes, spokesman for Flagstar Bank, said he could not comment on Wood's case other than to say the bank has "reached out to her."

The Tampa Tribune first reported about Woods' situation last month. Her home is one of 12 built in the newly-developed Belmont Heights Estates. The Tampa Housing Authority owns the master-planned community, which mainly consists of public housing apartments.

The single-family homes, though, were sold to consumers as part of a homeownership push by the federal government. Most of the homeowners received down payment assistance.

Woods works fulltime and has two young daughters. Her husband passed away in 2007, the same year she purchased the home for $165,000.

Woods received $60,000 through the city of Tampa's down payment program, and another $30,000 from the Tampa Housing Authority because she agreed to buy in Belmont Heights.

All 12 of the homes were constructed with toxic Chinese drywall. The homes join thousands of others in Florida with the bad drywall. But what sets this situation apart is that taxpayers also invested in these homes that are now nearly worthless.

Builders typically use domestic drywall but resorted to the imported wallboard during the housing boom. The federal government recommends affected homes be gutted and the drywall replaced. It's an undertaking builders say can cost about $100,000. Many builders have relocated homeowners and remediated homes.

But Woods' builder, Tampa's Banner Homes, has gone out of business.

During the housing boom, the Tampa Housing Authority received a federal Hope 6 grant to raze its east Tampa housing project, Belmont Heights Estates. It hired New Jersey-based Michaels Development Co.

The developer hired Banner Homes to construct the houses. Both the housing authority and the developer say they have no liability because Banner built the houses.

"They want to point fingers," Woods said. "I'm not here to point fingers at nobody. I just want them to rectify what happened to my home."

Woods said her insurance company has agreed to give her $20,000 to fix visible damage from the leak. But the policy won't cover things such as piping directly damaged by the drywall.

Woods said the help from the insurance company won't be enough to make her home livable.

"If you go in there and fix those walls the way they are with the other toxic walls in there, you're only bringing bad news to yourself again," Woods said.

So, for now, she's renting an apartment in east Tampa. She doesn't know how long she'll be able to stay there, though.

Woods said she's hanging on to the returned checks and wants to send them back to the lender.

"I don't think that me and my children should suffer for somebody else's doing," she said. "Now, we're going to suffer by not having a roof over our head."