Mold Also a Concern for Commercial Servicers.

Washington -- A growing concern for lenders and servicers is how to manage mold since the problem has expanded from the residential side of the mortgage market into the commercial arena where claims are occurring more frequently, according to the Mortgage Bankers Association's Commercial/Multifamily Mold Working Group.

The group, which is comprised of MBA members who work in commercial real estate finance, property inspections and insurance, has released a white paper, "Mold: Steps Toward Clarity," to be used as a educational tool to effectively mitigate mold and dampness for indoor commercial spaces.

Don Glitz, vice president, corporate risk manager at GMAC Commercial Holding Corp. and chair of the Mold Working Group, said the most important thing is for lenders and servicers to develop and impose routine programs for control and containment of mold on building owners and managers.

"There are particular areas of the country where rainfall is more common, more frequent. You have to seek out potential sources of water and eliminate them. In some parts of country such as Florida and California, there are more cases of mold because of the climate. But there are also mold issues in upstate New York and Pennsylvania," Mr. Glitz told Mortgage Servicing News.

"There are certain structures that are more susceptible such as multifamily housing, motels and hotels, and assisted-care facilities where there is a lot of heating and air-conditioning equipment in places where water can accumulate."

The Mold Work Group worked for over a year to develop the paper, which was open for a 45-day comment period at which time key industry experts were asked by the working group to thoroughly review, question and comment on the paper before releasing the final version to the public.

"We worked with lenders, servicers, engineers, insurance people, ratings organizations, technology people and contractors. All of them said this is a great paper. At the same time, some said to add more for the steps to remediation," said Mr. Glitz, whose own background is in insurance.