Arizona Law Holds the Foreclosed Responsible for Debt

[efoods]A new law passed by the Arizona Legislature that makes homeowners liable for tens of thousands of dollars on homes lost to foreclosure is now the focus of an intense repeal battle.

An amendment to the state’s foreclosure laws, passed in the recent legislative session, was designed to protect small community banks from people buying speculative new homes they can’t sell for a profit.

But the impact of the change is much larger. It makes some homeowners in foreclosure liable for the difference between their mortgage and what their lender can recoup from reselling the house. In the current housing market, the difference is generally more than $100,000 on the typical Valley foreclosure.

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