Oregon Meth House Owners Settle With Freddie Mac

May 2, 2013— -- An Oregon family who unknowingly bought a house that was used as a meth lab has settled with Freddie Mac, the seller of the previously foreclosed home, and is working with lawmakers to require disclosure about whether a home has been tested for contamination.

The Hankins family thought they had a good deal when they bought a foreclosed home in Klamath Falls, less than 20 miles north of the California border. A realtor showed them the home, which was sold through HomeSteps, a listing service for Freddie Mac, the government-sponsored housing organization. They purchased it for $36,500.

Jonathan Hankins, 33, and his wife, Beth, 29, started renovating the home in early June and moved into the two-bedroom 850-square foot home before the end of the month.

After three weeks of living in their home, however, they started having severe headaches. Their son, now 3, also became sick.

"We mostly experienced extreme dry mouth and had mouth sores, making it extremely painful to even drink water," Hankins had said.

The Hankins were not sure why they were sick until neighbors told them they suspected the home may have been a former illegal methamphetamine drug lab.

Freddie Mac recently settled with the Hankins over their home and agreed to review their policies. The Hankins bought another home about 25 miles away from Klamath Falls.

"After speaking to the Hankins and hearing their concerns first hand we were able to work closely together and come to a mutually agreeable resolution," according to a statement by Freddie Mac. "We will continue to review and update our policies to protect our buyers and their confidence in HomeSteps homes."

After neighbors informed the couple about the home's history, the Hankins said they contacted contractors who advised them to have the home tested for meth residue. They bought a kit for $50 and swabbed their home. After submitting their results to a lab, they learned that they had 38 micrograms of methamphetamine residue. The Oregon Health Authority's minimum to require a homeowner to clean up their home is 0.5 micrograms per square foot.

The family contacted Freddie Mac, trying to get answers about why they were not informed about the home's history. The problem is the local authorities did not contact the Oregon Health Authority, as is customary, because there were no recent drug-related enforcement actions related to the home.

The couple started a petition on Change.org to "stop selling former meth labs to unsuspecting buyers," garnering over 212,000 signatures. They delivered the petition to Freddie Mac in October and were on a national media circuit since October, trying to spread awareness about an issue that homes across the country have experienced.

"We're certainly grateful for Change.org and all of our supporters. We don't feel like we would have gotten this far without them. We're also thankful to Freddie Mac to working with us once they were aware of our concerns," Jonathan Hankins said about the settlement.

Freddie Mac said last October that they bought the home in an "as-is" condition, saying they and the listing agent did not have information about the home's history.

"If we had, such information absolutely would have been disclosed," Freddie Mac previously said. "We strongly encourage buyers to inspect homes and to conduct any tests they want to before making a purchase decision."