NORTH HILLS — In the six years following the devastating Northridge earthquake, the U.S. Department of Housing and Urban Development sold 18 units in a 50-unit condominium complex so badly damaged in the shaker that two private engineering reports called for much of the development to be torn down and rebuilt.
Some of the homes in the Nordhoff Townhomes complex were sold to investors, who were hoping to snap up properties at bargain-basement prices. Others were sold to buyers who said they were never told about the condition of the property.
"I was shocked that the federal government would allow property to be sold and not think about the consequences," said Myron Mikkelson, a 50-year-old decorated Vietnam War veteran. "You have a government selling you property that's not worth the money you paid for it."
Top HUD officials say the agency, like some of the homeowners, was in the dark on questions raised about the structural integrity of the complex.
The agency took ownership of the units at 9047 Langdon Ave. when the owners defaulted on HUD-backed mortgages. HUD officials said they didn't learn of the engineering reports--written in 1995 and 1999--until last month.
"This is of concern to us," said William Apgar, federal housing commissioner with HUD in Washington. "We were not aware of the damage. . . . We had no indication.
"Now that we're aware, we will not be putting more people in this building."
Some attorneys and quake assistance groups say the problem goes beyond HUD-owned homes, extending to properties throughout the Valley.
"One of the things we've seen over and over again is all kinds of sales being made in which no one pulled up the carpet to check to see that the slab was cracked," said George Kehrer, executive director of CARE, a nonprofit group that has assisted quake victims. "You've started seeing the tip of the iceberg now."
HUD's own policies clearly state the agency, which has helped millions of low-income and minority renters become homeowners by guaranteeing mortgages, will not accept damaged goods. After a borrower defaults on a HUD-backed loan, the lender (typically a bank or mortgage company) is required to correct any known defects before transferring ownership to HUD.
HUD officials said lenders continued to issue mortgages for units in the complex--for both HUD-backed and other units--throughout the last six years.
