A WORKER was seriously ill in hospital last night after a suspected toxic leak at a controversial abattoir incinerator that left three other people needing medical treatment.

Emergency services were called to the plant in Brechin, Angus, shortly after 10am yesterday, after reports of staff suffering from breathing difficulties.

A 53-year-old man was in the high-dependency unit at Ninewells Hospital in Dundee with “severe damage” to his lungs after the incident. Doctors described his condition as “serious”.

A female paramedic who responded to the emergency call was among the others treated in hospital.

It emerged last night that the Scottish Environmental Protection Agency (SEPA) had served three enforcement orders on the Sacone Environmental plant over the past year.

The facility - which burns the carcases of animals - has now been closed down.

It is believed those who fell ill may have been overcome by sewer gas from rotten meat products.

Apart from the man in a serious condition, two other workers, aged 53 and 34, were admitted to hospital with irritation to their lungs. The 41-year-old paramedic, who treated one of the men at the scene, also required treatment.

Tayside Fire and Rescue said ventilator fans at the incinerator had not been working yesterday morning.

The Health and Safety Executive has launched an investigation into the incident. A spokesman said its officials were waiting to be given the all-clear before entering the premises.

Tayside Police said the gas involved was believed to have been potentially fatal hydrogen sulphide, which can arise from the decomposition of organic matter. Exposure to it in low concentrations can result in eye irritation, sore throat, coughing and breathlessness.

The incinerator, which is thought to employ about 30 staff, has been the subject of long-running complaints from nearby residents about unpleasant odours.

Last month, SEPA issued an enforcement notice against the plant after complaints from neighbours. The agency said it was investigating mechanical breakdown of pollution control equipment, which possibly contributed to the odours.

No-one from Sacone Environmental was available for comment last night.

Alphonso Jackson, secretary of the U.S. Department of Housing and Urban Development, is in California this week to discuss the Bush administration’s response to the foreclosure crisis. He’ll address the Commonwealth Club in San Francisco today, then travel to Southern California to visit community groups.

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HUD oversees the Federal Housing Administration, an agency created during the Depression to stimulate home ownership. To increase liquidity, FHA buys and insures bank-issued, fixed-rate mortgages for challenged borrowers, but it is confined to loans of less than $362,790, which is why it has only a minimal presence in high-cost states such as California. Borrowers pay insurance premiums of 1.5 percent of the loan value up front plus 0.5 percent of each monthly payment for a certain time.

HUD wants to update the program by increasing the FHA’s loan limits; matching insurance premiums with a borrower’s credit profile instead of charging flat rates; and eliminating the 3 percent down payment requirement. (A temporary increase in FHA loan limits is part of the economic stimulus act signed by the president in February, but it lasts only until year’s end.)

Separately, on Monday, Hope Now, the administration’s foreclosure prevention coalition with lenders, said it had reworked more than 1 million mortgages for at-risk homeowners since July. About a quarter of them were loan modifications, in which lenders froze or reduced interest rates. The rest were repayment plans.

Jackson spoke by phone with The Chronicle Monday morning. The following has been edited for length and clarity.

Q: How is the administration addressing the rising tide of foreclosures?

A: We’re doing everything in our power to make sure we assist homeowners. Some months ago, in August, I announced FHA Secure. It simply says that if a person has paid their house note on a timely basis until the teaser rate jumped substantially, we’re willing to work with those persons to make sure they stay in their homes. We have had over 300,000 applications and have helped finance 100,000 people to stay in their homes.

More important is counseling for home buyers. Too many people do not get the right kind of counseling. They should know exactly what they’re getting when they decide to buy a home and be able to read and understand the fine print.

We want safer mortgages. That’s why we go out of our way when people (face) foreclosure to work with them. We’ve gone from $10 million in (federal funds for) housing counseling to over $50 million.

Also important is that we’ve gotten the (lending) industry to work with us to help people. (The administration has said banks agreed to freeze interest rates for some borrowers and to temporarily halt foreclosure proceedings for others.)

Q: Many consumer advocates have said the administration response has been too little, too late. You said FHA Secure has helped 100,000 people, but that’s a fraction of some 2.1 million expected to go into foreclosure in the next 18 months to two years.

A: (FHA Secure) won’t address all the problems. If Congress can reconcile the FHA Modernization Act, we can serve another 800,000 families. Before, FHA loans were limited to $362,000. With the economic stimulus package, that can go to $729,000, which will help people in California and the East Coast.

Q: When will you start making the higher-limit FHA loan under the stimulus plan? How do they work?

A: They (were) available as of (March 2). We buy the existing mortgage (made by a lending institution) and we make money from that mortgage. It’s not like we make the mortgage ourselves.

Q: You became HUD secretary in early 2004. Subprime lending started taking off around then and peaked in 2005 and 2006. Why didn’t anyone in the administration foresee problems with giving mortgages to people who could not afford to repay them? Was there any awareness that these loans were made disproportionately to minorities?

A: We did see it. That’s why three years ago we started pushing for FHA modernization where we would have the flexibility to (guarantee) loans.

Lots of loans were made by the seller down-payment companies. They did not check credit. Lots of loans were made over the Internet. Lots of loans were falsified income. We saw this coming and we tried to head it off. That’s why we introduced the legislation. Every year it passed the House unanimously but the Senate would never take it up. Because of the crisis, the Senate is finally taking it up this year.

Q: Why didn’t anyone act to rein in potentially abusive lending practices?

A: We didn’t have the ability to do that. We really did not. This is a free-market system. We can’t tell banking institutions how to operate. They do that themselves. We can’t tell mortgage brokers and insurers how to operate. Congress now is looking at legislation to address just those issues.

Q: What is your prediction of how much home prices may decline nationwide and how long it will be before the housing market reaches bottom?

A: I think that probably we are 12 to 18 months away from the bottom. I think we will not see many more substantial (price) drops of homes than we’ve seen already. We still have an inventory of existing homes, that has gone from 4.5 months to 10.5 months to sell (all the homes currently on the market). We’re not creating new inventory like we were just eight months ago. If we continue to hold the pattern we have with the strong economy we have, I think we’ve seen the worst of it already.

If you go

Who: U.S. Department of Housing and Urban Development Secretary Alphonso Jackson

What: Address on solutions to foreclosure crisis

Where: Commonwealth Club of California, 595 Market St., San Francisco

When: Today; check-in 11:30 a.m., speech at noon

How: Call (415) 597-6705 or register at «www.commonwealthclub.org». Tickets are $8 for members, $15 for nonmembers.

E-mail Carolyn Said at csaid@sfchronicle.com.

Danny Cipriani will make his first Test start when England tackle RBS 6 Nations Championship opponents Scotland at Murrayfield on Saturday. Cipriani has been handed the full-back role instead of Gloucester’s Iain Balshaw, who drops to the bench.

The 20-year-old Cipriani has been playing fly-half for Wasps with considerable success, but Jonny Wilkinson retains the England No10 shirt. Cipriani’s two previous England appearances both came during the current Six Nations campaign as a substitute against Wales and Italy.

England head coach Brian Ashton makes two other changes from the side that beat France 24-13 in Paris 10 days ago. Bath hooker Lee Mears is preferred to Bristol veteran Mark Regan, who misses out completely, with Leicester forward George Chuter providing bench cover. It will be Mears’ 22nd cap but only his fourth start, and his first since England faced South Africa at Twickenham in November 2006. Ashton’s decision could signal the end for 36-year-old Regan as an international player after 46 caps during a Test career that started more than 12 years ago. Chuter, meanwhile, has not been on England Test duty since the World Cup last autumn. The other switch is enforced, as Leicester flanker Tom Croft takes over from Wasps’ James Haskell. Haskell suffered an ankle injury during the France clash and was replaced by 6ft 5in Croft barely 20 minutes into the game.

Balshaw’s demotion is no surprise, given that he has struggled for form throughout the tournament. Cipriani, unquestionably the hottest property in English rugby since Wilkinson, now has a chance to show what he is made of in the cauldron of a Calcutta Cup occasion. He is no stranger to the full-back position, having featured there for Wasps before Christmas, and he should help give England a far greater attacking thrust.

Earlier today Scotland recalled No8 Simon Taylor for Saturday, but there is no place for Scott Murray in Frank Hadden’s matchday squad. Taylor, 28, will make his first appearance since the World Cup quarter-final defeat to Argentina after recovering from a hand injury.

The exclusion of Murray from the 22-man squad comes as a surprise, with the 87-cap lock’s recall expected to see him handed at least a place on the bench. Stade Franзais back-row forward Taylor replaces Kelly Brown who drops to the bench, and Hadden has shown belief in his team by making just one further change, as Graeme Morrison replaces Glasgow Warriors team-mate Andy Henderson at inside centre.

Scotland have lost all three of their matches in the Six Nations this season, slumping to defeats against France, Wales and Ireland. But Hadden expects Taylor, who will win his 59th cap, to strengthen the side. “Simon Taylor has played well in the three games for his club since recovering from a hand injury and he is now ready to return to the national side,” he said. “Graeme Morrison is being rewarded for his outstanding performances for the Scotland A team, away in Italy and then against Ireland A at Perth.”

The captaincy remains with scrum-half Mike Blair, but regular skipper Jason White should be involved at some stage. He is named on the bench after recovering from a head injury. There had been questions over the fitness of Nathan Hines and Scott MacLeod but both men keep their places in the second row.

Edinburgh centre Nick De Luca was unavailable to Hadden after sustaining an ankle injury on Magners League duty with his club last Friday.

Scotland team H Southwell (Edinburgh); R Lamont (Sale Sharks), S Webster (Edinburgh), G Morrison (Glasgow Warriors), N Walker (Ospreys); C Paterson (Gloucester), M Blair (Edinburgh, captain); A Jacobsen (Edinburgh), R Ford (Edinburgh), E Murray (Northampton Saints), N Hines (Perpignan), S MacLeod (Llanelli Scarlets), A Strokosch (Gloucester), S Taylor (Stade Francais), A Hogg (Edinburgh).
Replacements F Thomson (Glasgow Warriors), A Dickinson (Gloucester), C Smith (Edinburgh), J White (Sale Sharks), K Brown (Glasgow Warriors), R Lawson (Gloucester), D Parks (Glasgow Warriors).

England team D Cipriani (Wasps); P Sackey (Wasps), J Noon (Newcastle), T Flood (Newcastle), L Vainikolo (Gloucester); J Wilkinson (Newcastle), R Wigglesworth (Sale Sharks); A Sheridan (Sale Sharks), L Mears (Bath), P Vickery (Wasps, capt), S Shaw (Wasps), S Borthwick (Bath), T Croft (Leicester), M Lipman (Bath), N Easter (Harlequins).
Replacements G Chuter (Leicester), M Stevens (Bath), B Kay (Leicester), L Narraway (Gloucester), P Hodgson (London Irish), M Tait (Newcastle), I Balshaw (Gloucester).