We just went through a living hell with our former house. There was hidden rot and mold inside the walls due to construction errors. The whole house needed to be gutted and rebuilt from the ground up. On the advice of numerous contractors, engineers, mold remediators, etc. we initially believed the situation was isolated. Thus, we spent much of our money and took out a loan to repair a few areas. When the problems still weren't fixed, we got more opinions and discovered the whole house was screwed. We also discovered that ours was not the only house that this builder ruined; there was another owner a few towns away whose house also had rotted through. He spent 6 years fighting with the builder and finally was able to get them to rebuild his entire house. We were not so lucky. After talking to several lawyers, we learned that because the house was built 10 years ago we had no legal rights to go after the builder (or the inspector, or previous owners). We could not afford a deficiency judgement, or the taxes that would come with the lender's "forgiveness" and we had to get out of there ASAP as it was unsafe. We filed for Chapter 7 and we were discharged 2/22/16. Prior to filing we had never had late payments on anything, and our credit was 800+. Now it is under 600, we cannot get a car loan at a bank or credit union, and they mostly shut down once they see/hear "bankruptcy". We didn't spend ourselves into bankruptcy, and we did everything possible to avoid it! Even worked with the governor's office! Our story was in the newspaper, too! I am wondering if there is any way to petition to have length BK appears on our credit report reduced, due to the circumstances? Or some other way to get people to realize that we are not a lending risk? I have put together this letter (along with letters from our representatives, engineer's report, etc.), and would appreciate feedback on it, or any other ideas you may have. Thank you!
This note is to explain the reason for bankruptcy appearing on our credit history. Prior to October 2015, we had between 790 - 850, no late payments, delinquencies, or collections. We had bought and sold our house in -----, bought and paid off several cars, and had no budgetary problems.
In July of 2015, we discovered active mold and rot inside of the walls our house and on the structural framing of the house. The house was 10 years old, and we had been living there (as second owners) for 2.5 years. We discovered the problem when we cut a section of drywall to access what we thought was a leaky pipe.
We were initially told by several mold remediation companies and contractors that the mold and water damage were due to ice dams. Based on this, we took out an ----- loan to complete repairs and properly vent and insulate the attic, walls, and basement. The loan was for $15,000 and we spent several thousand out-of-pocket, as well. ------'s health was so compromised by this time that she had to move in with relatives for the remainder of 2015.
The improvements did not solve the problem. There was still an overpowering mold odor in the house. After further investigation by an industrial hygienist from Air Quality Management in -------, we discovered that there was more mold and rot in all four walls that they inspected. A controlled drywall removal performed by the remediation company revealed that the plywood surfaces in the wall cavities were covered in black and yellow mold and rot.
Further investigation by numerous contractors, energy auditors, and forensic engineer ----- uncovered serious construction errors. These errors lead to outside water infiltration and air intrusion, which, in turn, created the perfect environment for mold growth and rot. We later learned of another home owner in ----- who had to deal with the same problems in his house built by the same company.
The roof, the decks, and the garage were also improperly connected to the house and caused significant mold and rot in the house walls. All parts of the house needed to be gutted down to the studs, including the roof, the porch, the deck, the floors, and all of the walls. The grading and site work were also incorrect, so extensive excavation was also necessary to avoid additional rot and mold. It would have cost as much, if not more, to remediate and repair the house as it would have cost to build a new house.
We explored every possible avenue looking for legal and/or financial assistance to be able to complete the repairs. Our only legal option would have been to sue the former owners, but we could not find any evidence that they knew of the the problems. Our other options were barred due to statute of limitations, limitation of liability clauses, insurance exclusions, and more. In addition to working with the --local newspaper, the following is a partial list of how and where we tried to find assistance:
1. Governor LePage’s office - chief policy advisor, --------
2. William Burney, Maine HUD Director, ----
3. Senator Angus King -----
4. Senator Chris Johnson -------
5. Attorney General -----
6. Secretary of State ------
7. Chellie Pingree’s office --------
8. Home insurance provider
9. Local charities and organizations
10. Housing counselor
There was not sufficient financial assistance or legal recourse available to us. Our health was so affected that we had to find alternative housing. We weighed our options and decided that bankruptcy was our most logical path to health and recovery. We did everything we could to find a way to repair the house and neutralize the dangers to our health. Sadly, there were no viable options. We were forced into bankruptcy and have had to pay the price for the builder’s construction negligence.
We filed for bankruptcy due to unsafe and unhealthy living conditions in the house we owned in ---. We were left with no other options if we wanted to protect our health and move on with our life and healing process. We surrendered our house through bankruptcy. The deed transfer will occur through the uncontested foreclosure process. These two events are anomalies in our financial history and do not represent our risk as borrowers. Our past credit history and the effort we put into finding assistance with our house accurately reflect who we are as borrowers.
I ask that you keep our situation and past payment history in mind when considering our loan application.
Thank you for your time and understanding.
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