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I had some insulation put on half my basement wall. Since then I have been having a problem with mold.I know my basement walls leak. Could wet insulation cause mold? If so is it bad mold. Alls I know is I have white stuff growing everywhere in basement., and there are no visible leaks.

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do you have pictures? – bib Jul 24 '13 at 1:21
if you know your walls leak, don't finish the basement. – DA01 Jan 22 '14 at 17:58

White fuzz on the walls of the basement may be harmless mineral deposits called efflorescence from slow water movement, not mold.

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Nothing but rigid foam or spray foam should be put directly on basement walls. If you reading the Building Science documentation on basement environments you will see that if moisture is introduced on the walls there needs to be a proper gap for the water to drop and evaporate. Without airflow the water isn't going anywhere and to make matters worse the area is slightly warmer than the surrounding are because it is insulated.

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Moisture provides an environment where many molds thrive. Insulation reduces air flow along the wall surface, reducing the the ability of moisture to be dissipated by evaporation. Additionally, many molds thrive in moist, warm environments. Evaporation creates a cooling effect. When evaporation is restricted, the surface temperature is warmer, and the insulation helps keep it that way.

Wet insulation does not directly cause mold, unless it was contaminated with spores. It does create an environment that is conducive to mold growth.

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