The Associated Press has reported today that a number of banks that own Florida homes containing faulty Chinese drywall are refusing to participate in a class-action lawsuit against the drywall manufacturer and supplier. According to Podhurst Orseck attorney Victor Diaz, lead counsel for plaintiffs in the drywall class action, banks have received numerous notices and requests to join the class – both by phone and priority mail – and not a single bank has responded.
He believes this is likely because the banks are simply on auto-pilot now, wanting to move quickly to rid their books of toxic assets. In this vein, it is easier for them to sell the homes “as is” and write off the debt through TARP monies or other subsidies than to go through the litigation and force the Chinese manufacturer and U.S supplier to pay for and/or fix the problem. This means less payouts by those actually responsible for the Chinese drywall epidemic.