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."

Freddie Mac said it encourages "home shoppers to see if the addresses of homes that interest them are on the registries state and federal agencies keep of known clandestine meth labs."

The federal registry can be found on the Drug Enforcement Administration's (DEA) National Clandestine Laboratory Register website.

Freddie Mac also said "concerned home shoppers can also check an address with local law enforcement."

The Hankins had said Freddie Mac encouraged them to test the structural integrity of the property. Their home is not on registries because there was no enforcement on the property.

Though the Hankins have settled with Freddie Mac and have moved into their new home, they are continuing to raise awareness about this topic by testifying in front of the Oregon state legislature on Wednesday.

"Our goal is that we will be tireless advocates for future homebuyers so they don't have to face the same nightmare that we have," Jonathan Hankins said.

Republican state representative Gail Whitsett has introduced house bill 3499, which asks for foreclosed or auctioned homes to be tested for methamphetamine or to have a posting on the house that indicates a home has not been tested.

"A lot of people don't think about it," Whitsett said. "If you buy a home, it's not something that comes to the forefront. You don't necessarily think about methamphetamine."

Whitsett said she hopes to standardize methamphetamine testing in the same way that lead and mold testing is required in the state, especially for homes that are not listed by the previous owners.

She said there are over 800 homes scheduled for auction in 30 of Oregon's 36 counties that likely have little or no information about their history.

Only five percent of methamphetamine labs have been discovered by authorities, according to the Oklahoma Bureau of Narcotics and Dangerous Drugs Control.

Brett Sherry, program coordinator for Oregon Health Authority's Clandestine Drug Lab program, said the number of homes that local authorities refer to him have fallen dramatically since the program started in 1990.

Police refer homes that were illegal labs for any number of drugs, though most are producing methamphetamine.

Sherry said he did not have a record of the Hankins' home.

"It's very possible the property was used for manufacture or meth use," he said. "If someone smokes methamphetamine, that can contaminate the surface with meth residue."

The busiest year was 2001, when the program saw tested 324 labs.

In the past three years, only 10 labs have been referred to the program per year.

So far this year, seven homes have been reported to the program.

There is no single common symptom if someone is sick from methamphetamine residue, Sherry said, but it is wise to get a home tested, if you suspect it is contaminated. Otherwise, a family could be exposed to any number of toxic chemicals, like sodium hydroxide, which is normally used in drain cleaners to dissolve materials.

"The example we typically use is a child crawling on floor," Sherry says. "It's very easy for them to absorb methamphetamine residues."