Toxic mold devastates homeowners

What can be done to address and even prevent the problem?
By Kelly O'Donnell
NBC NEWS

June 28 - First it was radon, then asbestos. Now there's a new household scare that's attracting wide attention and costing money: Toxic mold. In its basic form, mold is all around us, part of daily life. But all of a sudden insurance companies are under siege with claims from homeowners who are getting sick, even being driven out of their houses, they say, by mold contamination that could cost billions of dollars to clean up.

IT'S INSIDIOUS, unsightly and inescapable -- fungus.

"Mold is essentially everywhere. It's on building surfaces and it flows through the air continually," says Dr. David Straus, a microbiologist at Texas Tech University.

And it's increasingly a threat to your home and your health.

"This had been our dream home," says owner Melinda Ballard. "Now of course is nothing more than a nightmare."

Mold invaded Melinda Ballard's Texas home. This mess began with a bathroom plumbing leak, she says, her home owners insurance failed to properly fix.

Mold thrives on moisture and quickly spread through her house, hidden inside walls.

"This is what comes out of it," says Ballard. "This is stachybotrys."

Her home was so infested, she claims mold caused her family neurological problems. A Texas jury decided her insurer committed fraud and mishandled her claim, awarding her $32 million. Farmers insurance may appeal.

Stachybotrys is considered toxic mold.

"We know exactly how dangerous the microtoxins produced by this organism are. They are extremely dangerous," says Dr. Straus.

It's so dangerous, it's listed in a military manual as an agent of "biological warfare." Experts say a small exposure at home can make you sick.

"Such things as nose bleeds, vomiting hair loss, diarrhea, cognitive dysfunction and hearing loss. Very serious health implications," says Dr. Straus.

Who's at risk? Anyone with water damage, a roof leak, broken pipes, or flooding.

Experts say mold growth may be getting worse because some cheaper construction materials like plywood and plasterboard are mold-friendly when wet. A bleach-and-water solution can kill some mold but serious cases can be unstoppable.

In Eugene, Ore., one family resorted to fire to eliminate toxic mold. They'll rebuild and start over.

There may be another solution at Texas Tech University. Researchers are working on a coating for new building materials they claim prevents mold growth. But it's too late for Melinda Ballard. Her home will be torn down.