On Aug 12, 4:04*pm, "John Grabowski" wrote:

snip.

*It's mold and there is probably moisture behind the wall to support its
growth. *Most likely this has happened before, but the previous owners did a
good job of covering it up for the sale. *I would cut out the entire lower
section of the wall and see what's going on back there.

John's right. Get rid of the contaminated drywall. Then you need to
treat the wall cavities with mold proofing materials as recommended by
experts of your choice (Yellow Pages). Finally, install mold proof
drywall and future water incursions (hopefully minimized, as below)
won't cause mold problems.

Do you know why the basement flooded? *You will need to address that problem
as well. *You might want to consider consulting with several basement
waterproofing companies.

An essential step. Dry houses are healthy houses, with the added
benefit of a very important feature to offer a future buyer should the
OP need to move.

Joe