Mortgage lenders in Massachusetts, worried that crumbling foundations would leave them holding paper on a worthless house, are telling their appraisers to pay special attention to foundations of homes built in the years a Connecticut concrete supplier used concrete tainted with pyrrhotite.
And at least one lender is considering mandating, if an appraiser finds the telltale cracks and crumbling of pyrrhotite-tainted concrete, that buyers have core samples removed from the foundation and tested to make sure the offending mineral is not present.
"This could be quite costly for a potential buyer," said Michael Ostrowski, CEO and president of Arrha Credit Union in Springfield. "We know it's already expensive to get a mortgage and buy a house. We are very conscious of those costs."
But the risk is great, he said.
"I have to protect my members' money when I lend it out," Ostrowski said.