According to an article published by The Arizona Republic, this is creating a mini-panic as several groups work to repeal the law before it takes effect:

“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.

Opponents of the new law say it will force homeowners to file for bankruptcy to protect their assets from lenders.

They also believe it will encourage more lenders to foreclose instead of trying to work out loan-modification deals with borrowers.

Some housing market watchers say the change could also deter investment in the state’s housing market, which would be a blow to the economy.

State Sen. Steve Pierce, R-Prescott, backed the legislation, SB 1271. He said in June testimony that the changes to the anti-deficiency statute are to help community banks that lend to investors hiding behind the current laws.”

Whether this new law ultimately sees the light of day remains to be seen, but regardless, if you are facing a situation where you are in trouble with your mortgage, you need to take action.  Contact the home loan modification lawyers at Phillips & Associates today to schedule a free initial consultation.