| A new law that has just been passed by the Arizona | | | | then promptly go into foreclosure when the value of |
| legislature is threatening to pour more misery on | | | | the property falls below the purchase price. |
| already distressed homeowners in the State. If you | | | | However, it makes no attempt to differentiate |
| are a resident of Arizona, and are currently in the | | | | between genuine homeowners and speculators. The |
| process of foreclosure, the new law could quite | | | | only criteria imposed is that those who have lived in |
| literally cost you hundreds of thousands of dollars. | | | | their home continuously for the last six months are |
| The new law, which will come into effect on The | | | | exempt from the new law. |
| 30th of September means that homeowners that go | | | | This means that retirees who have a retirement |
| into foreclosure will still be liable for the shortfall in | | | | home somewhere else are not exempt. Landlords |
| their loan after the home, is sold. Now, you do not | | | | who rent out their property are not exempt, neither |
| need me to tell you that this has huge and serious | | | | is anybody who bought their property in the last six |
| implications for all homeowners whose homes are | | | | months. This new law will even affect parents that |
| worth less than the outstanding mortgage. | | | | buy property for their kids to use when they are in |
| Take homeowners in Phoenix for instance, where | | | | college. |
| home prices have fallen by over 40%. Consider a | | | | It is scary to imagine how this will affect the |
| Phoenix homeowner who bought her house for | | | | thousands of homeowners who are reeling from the |
| $500,000 and it is now worth only $300,000. If she | | | | collapse in house prices in the state. Arizona |
| goes down the foreclosure route and the foreclosure | | | | happens to be one of the worst affected states in |
| is completed after the 30th of September, she will | | | | the country, and this law could send the number of |
| still owe the bank the difference between the | | | | new bankruptcies soaring for the stratosphere. |
| amount her home is eventually sold for and $500,000. | | | | The moral of this story is that unless you have an |
| In effect she could be liable for owing her lender | | | | exceptionally good reason, it is in your interest to |
| over $200,000. | | | | avoid going down the foreclosure route at all costs. |
| Isn't that a really scary proposition? | | | | You will be much better off considering other |
| Apparently, the law was passed to discourage | | | | options. One such option is a short sale. |
| speculators who buy property to sell at a profit, but | | | | |