New law forces foreclosed homeowners to pay banks even more
This is so grim it's impossible to make up. A new law in Arizona could potentially allow banks to hold homeowners liable for the difference between the selling price of a foreclosed home and the amount they borrowed against the house.
Arizona has one of the highest rates of foreclosure in the country. For many families in Arizona who purchased at the top of the bubble, the differences between their mortgage note and their home value is $100,000 or more. This new law would mean that, not only would the homeowner get their credit trashed and be locked out of real estate markets for five years or more, but the banks could actually continue to collect money after the foreclosure.