Defective Chinese drywall appears to be limited to the east coast and the south. I haven't heard of anyone in California having this issue. Here's more info: http://www.cnn.com/2009/US/03/18/chinese.drywall/index.html I just received a HUD email saying that they were going to help out homeowners who are suffering with this issue: "HUD TO ASSIST HOMEOWNERS FACING PROBLEM DRYWALL Temporary relief available to make home repairs affordable for at-risk borrowers WASHINGTON – On December 22, 2009, the U.S. Department of Housing and Urban Development announced that FHA-insured families experiencing problems associated with problem drywall may be eligible for assistance to help them rehabilitate their properties. In addition, HUD’s Community Development Block Grant (CDBG) Program may also be a resource to help local communities combat the problem. FHA is reminding its approved lenders that they are to offer special forbearance for borrowers confronted with the sudden effects of damaging drywall products in their homes including the financial hardship associated with related home repairs. “We’re instructing our FHA mortgage lenders nationwide to extend temporary relief to allow these families time to remove problem damaging drywall and repair their homes,” said FHA Commissioner David Stevens. “We want to remove additional pressures for these families as they find solutions to allow them to return to a safe, decent and sanitary home." FHA Type 1 Special Forbearance (noted in Mortgagee Letter 2002-17, available at: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/ml02-17.doc ) provides relief that is not typically available under an informal forbearance or repayment plan. This relief provided can include one or more of the following: • suspension or reduction of payments for a period sufficient to allow the borrower to recover from the cause of default; • a period during which the borrower is only required to make their regular monthly mortgage payment before beginning to repay the arrearage; or • a repayment period of at least six months. HUD is instructing lenders that no late fees are to be assessed while the borrower is making timely payments under the terms of the Special Forbearance plan. The total arrearage for a Type 1 Special Forbearance cannot exceed 12 months of delinquent payments. Lenders can review borrower applications and make a determination as to the most appropriate loss mitigation tool including loan modification, partial claim, or FHA HAMP. Any questions or clarification regarding the Type 1 Special Forbearance should be directed to the HUD National Servicing Center at 888-297-8685."