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The foreclosed house for sale on the up-and-coming street pined for fresh paint and other fixes, but the Hankins family saw its potential.
Plus, at $36,000, the price was perfect for a young family trying to make ends meet in small-town Klamath Falls, Ore.
"We said, 'It needs a little bit of love, but it's got good bones,'" Jonathan Hankins recalled. "We just had no idea that those bones were poisonous."
Within days of moving in this past summer, Beth Hankins, an ER nurse, started experiencing breathing problems. Then Jonathan got migraine-like headaches and nosebleeds. By the third week, their 2-year-old son, Ezra, developed mouth sores.
"He couldn't even drink water without being in pain," said Jonathan, 32.
They were about to schedule doctor visits when a neighbor shared the bad news: 2427 Radcliffe was a former meth house.
The family ordered a $50 testing kit and had the lab expedite the results, which revealed a contamination level nearly 80 times above Oregon Heath Authority limits.
"Our walls were poisoning us," said Jonathan, who quickly moved his family to a rental home.
Buying a foreclosed house from government-sponsored Freddie Mac meant the family was informed about being responsible for detecting hazards like lead paint and asbestos, but there was no warning from real estate agents or Freddie Mac about drug activity.
Because it was being sold "as is," the couple decided to save their money and skip a traditional inspection, which would have noted superficial repairs but not the chemicals used to cook the highly addictive drug. "In the case of methamphetamine, it's an invisible toxin," Jonathan said.
Twenty-three states, including Oregon, have laws requiring sellers to disclose if a property was ever used as a clandestine drug lab. In the Hankins' case, Freddie Mac says it never knew the two-bedroom, one-bath home had a checkered past.
"We certainly empathize with the situation, but we had no prior information about the way the home had been used," Freddie Mac spokesman Brad German told Yahoo News. "If we had, of course, we would have disclosed it."
It's a Catch-22 that Joe Mazzuca of Meth Lab Cleanup, a national remediation and training company, predicts others could find themselves in. Based on national and state data, Mazzuca conservatively estimates there are 2.5 million meth-contaminated homes in the U.S. "The signs and indicators aren't always there," he said. "You don't always see the meth residue. It's extremely dangerous stuff."
His concern was echoed at a congressional hearing in August on the efforts to curb domestic methamphetamine production.
Drug czar Gil Kerlikowske, head of the president's Office of National Drug Control Policy, testified that "U.S. meth lab seizure has more than doubled between 2007 and 2010, and these labs pose a major threat to public safety and the environment."
Mazzuca said the problem "is off the charts. We average a call every three to five minutes." One of those recent calls came from Michigan, a state with no disclosure law, where a father unknowingly purchased a meth-contaminated home. "He just buried his 14-year-old daughter after living in it for two years," Mazzuca said. "I could tell you stories like that for days."
With or without disclosure laws, Mazzuca believes scores of home buyers are at risk because only one in 10 meth labs are busted. Other times, he said, information can fall through the cracks by the time a big bank or government agency gets past the red tape of selling a foreclosed home.
He advised anyone considering buying a foreclosure to do their due diligence. He suggested the following actions:
- Check the DEA's National Clandestine Laboratory Register.
- Talk to the property's neighbors.
- Contact the local health department and police for past issues.
- Buy a kit to test for chemicals.
Jonathan Hankins in Oregon believes the seller needs to shoulder some of that burden.
"Consumers don't know about this problem, and a simple $50 test by them could have prevented all this," said Jonathan, who's now left to pay rent and a mortgage. "Thirty-six thousand may be a drop in the bucket to them, but it could ruin us financially."
He says his calls and emails to Freddie Mac have gone unanswered, so he turned to Change.org, a website that aims to promote social change by the use of online petitions. There he posted his frustration with what he calls the agency's false promise.
"Freddie Mac advertises, 'Our qualifying homes come with a reviewed title, and a repaired living space making them easier to sell and improving home values in your territory. We sell our homes responsibly. Freddie Mac is committed to having the best property maintenance and sales standards in the country.' We had no reason to expect otherwise. Instead, they irresponsibly sold us a ticking time bomb of dangerous chemicals without even telling us."
Attorneys have told the Hankins that the "as-is" fine print leaves them few options.
Decontaminating a former meth lab can run anywhere from $5,000 to $150,000, according to experts. Jonathan says he's been quoted a clean up cost more than his house is worth.
"We're not really angry at [Freddie Mac], but we're shocked that this could happen to anyone in America," he said. "It's an opportunity for them to set a precedent for others in the mortgage industry."