More Foreclosures = More Closed Up Houses = Lots More Mold: What Banks and Realtors Don’t Want to Talk About


It’s sort of the STD of this recession’s real estate foreclosure game. Embarrassing, smelly, uncomfortable at best, potentially hazardous if left untreated, and very often a deal breaker if you are one of the few that tell the truth.

Which is why an awful lot of people don’t want to talk about how many foreclosed homes in this country may be infested with mold. By some estimates, half of the foreclosed houses in the U.S. now have mold problems.

Nearly 20,000 foreclosures have gone through the courts since 2008, according to the Warren Group, a company that tracks foreclosure statistics across the nation. State officials say they have no way of knowing how many of those homes remain closed up and unsold, and how many are seriously infested with mold.

No one is reporting those kinds of facts to any state agency. Banks and real estate agents trying to unload these properties have no interest in publicizing unpleasant information. And the state doesn’t require the seller of a home to disclose serious mold problems.

“This is really a buyer-beware situation,” says Richard E. Maloney, director of trade practices with the state Department of Consumer Protection. “So if you’re going to buy a foreclosed home, you’d better know what you’re doing.”

Experts say foreclosed homes sweltering through hot, sticky summers like this one can be perfect growing environments for common indoor molds with lovely-sounding titles like Cladosporium, Penicillium, Aspergillus and Alternaria. (Those are the semi-bearable ones. We’re not even talking about nasty stuff like toxic black mold aka Stachybotrys Chartarum, a virulent strain some believe was responsible for the deaths of more than eight infants in Cleveland back in 1993 and 1994.)

When a bank forecloses on a home, it often shuts off the electricity and heat during warm weather months and basically seals the house shut. “If you do that in the summer,” says David Goldstein, vice president of Mystic Air Quality, a consulting outfit that tests buildings for high levels of mold, “you’ve created a greenhouse.”

All that’s needed for mold to flourish is a little moisture, from a pipe or toilet, rainwater or humid air seeping between the cracks, that summer sun, and “a food source, which is sheet rock,” explains Joe Pelli, owner of Servpro, a Fairfield County-based company specializing in cleaning up mold, water or fire damage.

Mold is everywhere. Its spores can survive for 20 years, lying dormant as they wait for the right conditions. Mold infestations can subside as cold, dry weather arrives and wait for six or even nine months, then surge and spread with the return of moist, warm conditions in spring and summer.

Earlier this month, Pelli opened up the garage doors to the basement of an older raised ranch on a quiet suburban street in Trumbull. There was no need for sophisticated testing equipment — the musty, decaying stench of mold wafted out across the driveway. “Don’t worry,” says Pelli, who’s been waging war on moldy houses for 30 years, “it’s the ‘good’ kind of mold.”

That’s an insider’s joke in the mold game. Pelli says real estate agents always tell potential buyers worried about mold that what’s in a house is the “good” kind that doesn’t really cause many health problems. By which they mean it won’t kill you.

“All molds, from a health safety point of view, are treated the same,” says Goldstein, who says indoor molds almost never cause anything close to fatal illnesses unless someone has respiratory or immune systems that are already compromised. But they can cause all kinds of other difficulties.

“We deal with people every day with health problems from mold,” says Robert Weitz. He’s a certified micro-bacterial investigator with RTK Environmental Group, which does a lot of testing for mold throughout Connecticut.

Officials at the state Departments of Consumer Protection, Public Health and Banking say they haven’t gotten any complaints about widespread mold problems in foreclosed homes. Representatives of the Connecticut Association of Realtors declined to be interviewed on the subject, as did a number of individual realtors.

“I don’t think there’s some sort of reluctance in the industry to talk about it,” argues Gene Marconi, legal counsel for the state realtors’ group.

Others disagree. “I don’t know one real estate agent who isn’t aware of mold issues,” says Pelli

Weitz says real estate agents, banks and insurance companies don’t want to talk about mold if they don’t have to. He says their attitude is often, “We don’t want to know about it, and if we know about it, we don’t want to talk about it.”

Testing for mold can cost $500 or more, Weitz explains, which means paying a lot for what is often very bad news. Pelli says ripping out and replacing mold-infested sheet rock and wood can cost thousands of dollars — money banks really hate paying on foreclosed homes that may have already cost them gobs of lost mortgage loan cash.

“Nobody really likes me,” jokes Goldstein, whose company does the same sort of testing, “because I get hired to tell you something’s wrong.”

Maloney says there is no requirement by the state for anyone selling a home to disclose the fact that there are mold problems. Marconi says the realtors’ association doesn’t think that’s needed.

“Mold is ubiquitous,” he points out. “It’s constantly in the air.” He argues the only time mold becomes a real problem is when there are significant amounts of humidity or water in a house, and there are other state disclosure requirements that do deal with that.

Home sellers are required to disclose problems with leaking roofs, water in the basement, flooding or humidity problems, according to Marconi, all of which serve as “warning signs that there could be a mold problem.”

Goldstein says he’s been seeing mold problems in foreclosed homes ever since he got in the business 23 years ago.

“If there’s more foreclosures today … then obviously, numerically, you’re going to have more mold growing in more buildings because they’re closed up,” Goldstein says.

Essentially, he explains, “When buildings get closed up tight, those buildings rot.”