Asbestos Could Mean Trouble for Mortgage Lending

Asbestos is often seen as something that affects an individual, in an isolated incident. The fact that diseases, such as asbestosis and mesothelioma often appear long after the exposure to the asbestos-containing materials occurred make their development seem singular.

But, of course, the problems with asbestos contamination is anything but isolated. Throughout California, the U.S. and much of the world, asbestos will be increasingly recognized as the clear and present danger. And this will begin to impact people beyond the individual victims of asbestos suffering from mesothelioma.

One group that may become more concerned with the presence of asbestos in the millions of buildings that were constructed during the heyday of asbestos utilization is the mortgage lending industry. In many places, virtually every building constructed prior to the mid to late 1990s could potentially contain asbestos.

And while this is a very real problem for individuals, who may attempt renovations, and become exposed to asbestos fibers released from drywall, plaster, ceiling tile, floor tile, pipe insulation, textured ceilings and many other sources within a building, it will also become a growing problem for mortgage lenders.

Because asbestos could be anywhere in a building, simply identifying it can be costly. Professional asbestos abatement is never inexpensive, but for some structures, the abatement process could rival the value of the properly alone.

This will be a growing issue. As these structures age, necessary maintenance and renovations will uncover more asbestos, and if the cost of abatement increases appreciably, some lenders may find it is no longer economically feasible to sell the property.

Someday, it may be necessary that every property sold will have to have an asbestos preclearance, certifying that it is not contaminated with the deadly fiber. Before that time, however, anyone purchasing a home or other structure is potentially buying trouble.