HOMESTEAD, Fla. – Jan. 5, 2010 – After months of legal wrangling, it appears one of the first lawsuits filed over faulty Chinese drywall is headed to trial in federal court.

Melissa and Jason Harrell of Homestead filed a lawsuit against South Kendall Construction, Palm Holdings, Keys Gate Realty and Banner Supply in March.

The couple moved out of their home, built in 2006, after the entire family experienced breathing problems and headaches, and the coils of their air conditioner corroded and their home smelled of chemicals. They attributed all of the problems to the imported drywall used to build their house.

On Wednesday, the Third District Court of Appeal ruled that Banner Supply had ample opportunity to inspect the Harrells’ home and make an offer to repair it. Attorneys for the supply company did not return phone messages. Banner Supply had argued it had not been given enough time to make a repair offer and avoid litigation. “The courts are not going to be taken in with technical defenses that delay getting to the real heart of the matter,” said Stephen Rosenthal, one of the Harrells’ attorneys.

Earlier, a judge had ruled the Harrells could sue for damages beyond the cost of repairs – they could also sue for the loss of value to their home, the cost of alternate housing and more extensive remediation to their house, from new pipes to new appliances.

“For the Harrells pretty much right now, all the legal barriers have been cleared,” their attorney Alex Rundlet said.

The Harrells’ suit could pave the way for others in the same situation, including thousands of homeowners from around the country whose cases are being handled by a federal court in Louisiana.

Drywall victims learned of other victories this week, too. After merely encouraging lenders to give families with Chinese drywall a break on their mortgages in the past, the U.S. Department of Housing and Urban Development instructed FHA-approved lenders that they must do so this week.

“This is more than encouragement,” HUD spokesman Lemar Wooley said. “It notes instructions and specific guidance for FHA lenders.”

Some families juggling mortgage payments and rent or who are paying for expensive repairs have already slipped into foreclosure or are on the verge.

Federal Housing Administration lenders have been told they are to temporarily suspend mortgage payments for homeowners with the tainted wallboard. Or they should allow borrowers already behind to pay only their monthly mortgage bill for several months, without making back payments. And homeowners should not be charged late fees if they are given these accommodations.

In addition, the agency’s Community Development Block Grant program may offer homeowners money to pay for repair costs.

For most other CDBG programs, people who receive grants cannot earn more than 80 percent of an area’s median income. But a community could decide that doesn’t apply to this situation, said Gloria Shanahan, a spokeswoman for HUD in Miami.

Homeowners would need to contact their city and county governments to see if they have money from the program and if the local government will consider grants for drywall repairs.

For more information about the special mortgage terms for homeowners with Chinese drywall, call the HUD National Servicing Center, 888-297-8685.

Copyright © 2010 The Miami Herald, Shannon Behnken. Distributed by McClatchy-Tribune Information Services.