Lennar admits drywall problems, but it's only a drop in the bucket

In an SEC filing Friday, Lennar (LEN) admitted that it has identified 400 Florida homes that have problems with defective Chinese drywall and has set aside $39.8 million to fix the problem. But that's only a drop in the bucket of homes built in the U.S. between 2004 and 2008 that might be affected.

Ultimately we could find that as many as 100,000 homes have the problem. Given the financial state of most builders, this could hit the bottom line very hard, which may be why the CPSC is moving so slowly on this issue. The AP reported in April that enough Chinese dry wall was imported to build about 100,000 homes. People in warm, humid climates will be the first to notice the effects of the defective drywall, but homes in northern climates could be impacted in several years.