House From Hell: Buyers' Nightmare Homes

March 8, 2013— -- The Hankins family had been saving for five years when they saw a starter home for sale for only $35,000.

They jumped at the chance and purchased the home in the foothills of southern Oregon's Cascade Mountains.

"One of my favorite memories was painting Ezra's room green, and he wanted to help so he helped dad," Jonathan Hankins told ABC News. "This is our home, this is great. It seemed too good to be true."

The house was a foreclosure advertised "as is." The Hankinses took out a loan instead of a mortgage and had a carpenter friend check it out instead of spending money on an inspector.

"We knew there were a couple of broken windows. We knew the furnace was probably on its way out," Hankins said. "Overall, the house had great bones. Little did we know that those bones would be contaminated and poisonous."

After weeks of sanding, priming, plumbing and painting, Hankins started getting dry mouth, nose bleeds and sinus headaches, and the house had a strong urine odor. Their dream house appeared to be making them sick.

Turns out the little starter had a secret past. It was once used as a meth den, and all the dangerous chemicals had seeped into the floors and ceiling.

"We ordered a test kit which only cost us $50," Hankins said. "The results came back at nearly 80 times our state's lowest level of contamination."

It's been seen before on the AMC drama "Breaking Bad." The hit show follows meth dealers who use a super lab with ventilation. But in the real world, "home cooking" all those dangerous chemicals leaves behind such high levels of poison, you have to put on hazmat suits to conduct a standard test.

Months later, the meth residue was still there.

"Contractors that specialize in clandestine meth lab clean-up have quoted us costs that are more than what the house is even worth," Hankins said.

Lawyers told them to walk away quietly because it's only illegal to sell a house with a problem if you know there is a problem.

"It's horrifying," Hankins said. "It's like a nightmare, you know, a home buyer's nightmare."

The Hankinses said the seller, Freddie Mac, should have known about the danger and that meth residue should require a warning, like lead paint and asbestos.

"It's very easy for them to come in and say, 'Well, we didn't live there, so we have no knowledge of it," Hankins said. "They didn't know some of those homes may be contaminated.

"The Hankins chose to forgo a home inspection or any other environmental test and bought the home in 'as is' condition," Freddie Mac said in a statement to ABC News. "We empathize with the Hankins [family] but neither we nor the listing agent had prior information about the home's history."

Real estate mogul Barbara Corcoran said buyers can't depend on the government, their leader or the seller to warn them.

"All Jonathan and Beth had to do was talk to the neighbor before they bought that house," she said. "Every neighbor who's next door to a meth house knows what's going on. They see the cops coming in. Or you could go the police station, talk to the police."

Freddie Mac may have not known what was in the house, but the local police department did. Officers went to the home 34 times while the previous owner lived there.

"We've been to this house several times," Chief Jim Hunter said. "We made undercover narcotics buys on at least three occasions."

The Hankins story is shocking, just like the story of Dr. Harold and Millie Mendelsohn, whose sprawling, six-acre estate in tony Pound Ridge, N.Y., carries an invisible sizzle.

Their neighbors include actor Richard Gere -- and one humungous power station.

Recently, they felt vibrations on their property and Millie Mendelsohn was zapped.

"The animals started going crazy on the property," Harold Mendelsohn said, "the horses and the dogs and the cats."

They've long abandoned the pond at their home after the fish died, they avoid the guest house and had the pool emptied. Now, they say, the sizzles spread to their home.

Among their reported maladies are intense headaches and a fear so strong, they've turned to using rubber. Harold Mendelsohn has to use rubber sheets to sleep while Millie uses rubber shoes in the shower.

But it is the kitchen she fears most. She won't even touch the faucet for fear of shock.

The Mendelsohns believe the stray power is coming from the power station just beyond the tree line in their backyard. They are suing their local power provider for $2.3 million. The utility said the couple is not entitled to any damages.

When they first moved in more than 20 years ago, the Mendelsohns didn't think the transformer would be a problem. But they estimate it has grown three times the size since.

"It's infuriating," Harold Mendelsohn said. "This was our dream situation, and I wish they could just fix it."

"It's just a nightmare," Millie Mendelsohn said. "We just have to leave it empty. Say goodbye to it."

Across the country, Nydia Regnier is just saying hello to her hellish home wreckers in the sky. The Regniers moved from bustling Chicago for a more serene lifestyle in Louisville, Ky.

"It's a great neighborhood and the people here are so nice," Regnier said.

The not-so-nice part is that the home is two miles away from an international airport.

When she went to look at the home, it was in the middle of the day and there wasn't a plane overhead. Daytime air traffic involves mostly small, twin-engine, regional jets. But at night, Louisville becomes the world hub for the giant package company, UPS.

On nights where the wind or weather require planes to shift their usual flight path, which happens about once a week, the sky lights up with jumbo jets every few minutes until 3 a.m.

Just like with the Hankinses and Mendelsohns, disclosure laws were not on the Regniers' side.

"They didn't have to tell us," Regnier said. "Some people, maybe, are just more desperate to sell the house than they are to do right by other people."

Louisville has been wrestling with this headache for more than a decade since UPS moved into town, Louisville airport's deputy executive director Karen Scott said.

"We've sound treated 135 units," Scott said. "We replace out windows and doors, provide attic insulation -- in some cases, heating ventilation and air conditioning."

But Regnier's home is located just nine houses outside of the cut-off line so she's out of luck.

"I can't go to that next block," Scott said. "The Federal Aviation Administration won't approve that for us, to be able to do that. Our community noise forum is working with the legislature on homeowners who are just outside the line.

"There really is a limited amount of what we can do," she said.

The FAA pays 90 percent of the estimated-$50,000-per-house insulation program.

"There are fees already in place that support the program that we're talking about," Scott said. "Where do you draw the line? And then you've got people on the next block over, what about us?"

Scott said they continue to work within the constraints and regulations they have but they just can't help everyone.

The Mendelsohns are suing their local power provider and asking for $2.3 million to relocate.

The Hankinses continue to pay the mortgage on their empty home and rent a second house to live in.

Freddie Mac said the couple should have done their own testing and the house was bought "as is."

But for the Hankins family, they may never buy another home again.

"Home ownership is the American dream, right?" Hankins said. "And when your dream becomes a nightmare, [it] makes it really hard to want to go back and start all over again."