Now his bank is threatening foreclosure.

Mr Tran lives in a caravan behind the two-storey full-brick house that was supposed to be his home. Fairfield Council has not issued an occupation certificate because of a number of serious defects.

Construction on the $330,000 house began in 2002 and Mr Tran alleges the ground was not properly compacted before the slab was laid.

``I couldn't do anything until the last day when [the builder] demanded the last payment,'' Mr Tran said.

``Under the contract it allowed me to keep the last payment and demand him to fix it.''

When a side of the house sank after a year Mr Tran took the builder, Full Brick Homes, and home warranty insurer Vero to court.

While the insurance is mandatory for builders to take out on houses under three storeys, it covers home owners only if the builder dies, disappears or becomes insolvent before the work is finished and problems are fixed.

Mr Tran was forced to take unpaid leave from his job because they didn't believe he was handling the job well under his stress.

In 2006 he was out of money and went into mediation with Vero but refused a $75,000 settlement offer that was verbally agreed to by his solicitor without consulting Mr Tran.

The insurer argued that the verbal agreement was binding but the case was dismissed.

Vero is appealing the decision.

``We had mediated an agreement to pay Mr Tran for the full costs to fix his home, as well as provide funds to pay for most of his legal bills,'' a Vero spokeswoman said. ``Unfortunately, Mr Tran has walked away from that ... offer.''

In the meantime, Mr Tran has monthly mortgage payments of $4200 to meet.

A senate inquiry into the last resort home warranty insurance scheme received 61 submissions earlier this year and the committee will release a report by October 16.

Full Brick Homes declined to comment and Fairfield Council did not respond before deadline.