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ABC Special Report
Investigation: New Home Heartbreak
Trump - NAHB Homebuilders Shoddy Construction and Forced Arbitration
Message from Jordan Fogal
Friday, 03 June 2005

YOU COULD BE NEXT! 

Unless this problem has dropped on your door steps, you probably aren't aware that it even exists. You may find the topic boring. You may say this could never happen to me, but if you have purchased a new home in Texas or you are planning too, you may be this state's next victim. 

If your new house starts to leak, floors start to buckle, walls fill up with water and mold grows up out of your carpet, as the uninformed will say," well I am going to sue my builder." That is no longer an option in Texas....Even if your new house becomes uninhabitable. New home buyers give up their 7th amendment rights and are bound to binding arbitration in their contracts. Most people don't know it, and if they do, they have no idea what they have just done. How arbitration works or what it will cost them. 

Homeowner’s policies do not cover builder defects. The builders' warranty insurance turns down 86% of all claims. You will have to move out of your house, it will go into foreclosure and you may have to file bankruptcy. You will need to have on hand the exorbitant funds necessary to repair any and all damages, as well as to find and fix the source of the problem. Some unscrupulous builders like mine will only "patch and piddle" in the first year, they will not accept the responsibility for the defective houses. These houses are being thrown up at warp speed, forty-two thousand of them in Houston this year.  

The permit department of this city is in shambles. They are expected to inspect 30 houses a day. They do not even go past the first floor in some 3 story homes. The roofs ARE NOT inspected. Many houses never get final inspections. 

Builders, like mine, have nothing but contempt for the homebuyers. They have become arrogant because they are protected by the law and can circumvent the law. In Texas you are suppose to buy it and shut up. 

I have gone before the mayor and city council twice. I have gone to Austin. I have gone to the Attorney General. I even called the FBI and the health department. I went to the Better Business Bureau, the Texas Residential Construction Commission, my state representatives Martha Wong, to Senator Ellis and my city councilwoman, Ada Edwards.  Then I went to the media. I have been on channel 2, channel 13, in the Houston Chronicle, the River Oaks Examiner and People Magazine.  

Most builders have binding arbitration clauses in their contracts. Your builder can even file Arbitration on you, complaining that you are a dispute. The filing and registration fees for me to file with AAA were $6,000 dollars. Be prepared to write a check for up to $100,000. You have to pay your lawyer; you witnesses, expert testimony, for subpoenas, and you even have to pay to rent the room.  These hearings are held behind closed doors and what goes on inside is upheld by the courts. The courts do not have a clue what goes on and they do not care. 

Middle class America goes up against a powerful builder and their team of lawyers. The builder is a repeat client and bad building practices have made AAA rich. It is a case of the haves and the have nots. You will have deadliness and you will have information to exchange but the other side does not follow the same set of rules. There are 2 sets of rules. One is for the haves and one is for the have nots.  

Please read the information on the web site HOBB.ORG.  It will help save you from making the most costly mistake of your life. For your own sake, I implore you to read and become informed before you buy a house in the state of Texas.

Jordan Fogal

 
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Reckless Endangerment
BY: GRETCHEN MORGENSON
and JOSHUA ROSNER

Outsized Ambition, Greed and
Corruption Led to
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