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As huge numbers of foreclosed homes work their way through the real estate pipeline, another problem is blossoming mold. When empty houses sit with all their utilities turned off it can be the perfect environment for mold and potentially for thousands of dollars in damage. From member station WKSU in Kent, Ohio, Kabir Bhatia reports.

KABIR BHATIA: In most homes, as residents go in and out and the seasons change, natural ventilation sucks moisture up to the attic and out through the roof. It's called the stack effect. And in many parts of the country, it's driven by air conditioning in the summer and heat in the winter.

But no one is going in or out of most foreclosed homes regardless of climate and the effects can be devastating. In some states, it's estimated that more than half of foreclosed homes have mold and mildew issues. Realtors across the country say they're seeing the problem in everything from bungalows to McMansions.

Mr. BOB BENNETT (Farsight Management): This is a nice house, you know. Kind of artsy-fartsy.

(Soundbite of laughter)

BHATIA: Bob Bennett runs Farsight Management in northeastern Ohio, which specializing in cleaning up water-damaged buildings. A full quarter of his work now comes from moldy, foreclosed homes where the electricity's been shut off. No electricity means no sump pump or dehumidifier for months or even years, and that often means mold slimy black or green patches creeping up drywall chest high and blanketing bathroom fixtures.

Mr. BENNETT: Now here, water came out of the sump, and it got underneath the carpet, came over to the wall, and then wicked up the side of the gypsum board. And so you can see this banding where the top of the wicking stopped. Do you see the growth on the paneling? Is that gross or what?

(Soundbite of laughter)

BHATIA: Even minor mold abatement can start at $5,000 and cost much, much more. In this particular case, Bennett estimates more than $6,000, plus the cost of new floors, walls and carpet. He wears a head-to-toe protective suit on most jobs.

Realtor Rebecca Terakedis shows an increasing number of abandoned, foreclosed and moldy but otherwise fine homes to prospective buyers.

Ms. REBECCA TERAKEDIS (Realtor): I have a release form that I use, and if the property's got a lot of mold in it, I don't even let my own husband go in without signing this disclosure because I don't want the liability. I had one really interesting; it was the middle of winter. There were icicles coming out of the windows above the garage, no heat, but it was 80 degrees inside of the house because it was self-composting.

BHATIA: Realtors say they don't think banks mean to incur thousands of dollars in mold damage just to save on monthly utility bills. But the mold problem appears largely to be a manifestation of the foreclosure crisis. Bills go unpaid, houses sit vacant, and the whole process takes much longer than anyone wants.

Ohio Bankers League President Mike Van Buskirk says by the time the banks process foreclosure paperwork, it's often too late.

Mr. MIKE VAN BUSKIRK (President, Ohio Bankers League): There are a lot of, you know, steps in the courts and the county sheriff and stuff that are involved in it. And while it varies across the state, some of them, thinking that they're helping the consumers, are really dragging out the process, so that it can take two or three years.

BHATIA: Realtor Jill Flagg says many lenders won't even sell a home for less than the mortgage note, so the house sits and sits, and it continues to grow mold.

Ms. JILL FLAGG (Realtor): I had an offer on a house with Bank of America where they have agreed to do a short sale, and it's been over two months, and they have not even responded to the offer. They don't have enough staff to move it along too backed up. They don't have enough qualified people that know what they're doing. And, you know, it's in a pile somewhere.

BHATIA: Charges of faulty paperwork have slowed the pace of foreclosures in recent months, and that may be exacerbating the mold problem as those houses sit and bake through the long, hot summer.

For NPR News, I'm Kabir Bhatia.

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