Refi loans could prove costly in foreclosure

[NVMojo]

Interesting article from July. Scary shit here, thank you bush and congress for the bankruptcy bill!! snark!

Orange County: Homeowners behind in their mortgage payments after hocking the house to pay for a major remodel or a new boat or car may be in for a rude awakening.

If they previously refinanced and their lender decides to foreclose, they may not only lose their house, but the bank also may be able to go after their other financial assets including stocks, savings and their paycheck.

And even if the bank doesn't go after their other assets, a foreclosure may mean a big tax bill from the IRS and state Franchise Tax Board for any shortfall between what the bank gets for the sale of the owner's home and the value of the loan.

"This is going to become a hot topic," predicts Bradford L. Hall, managing director of Hall & Co., CPAs in Irvine, who remembers the pain of foreclosures during the 1990s. "There's very little awareness of what can happen when you can't make your payments and are forced to sell your home for less than the mortgage balance or lose your home through foreclosure."

Foreclosure hasn't been a major issue in Orange County for a decade as homeowners in recent years enjoyed low interest rates and double- digit price appreciation.

more...

http://ocregister.com/ocregister/money/housing/article_1206268.php

[Kagemusha]

1. I'm still waiting to see what the doughnut hole does to the elections.

The bankrupcy stuff won't hit until the '08 cycle but, this stuff will definitely have political repercussions. Bankrupcy won't stop you from having a vote in America.

[FloridaPat]

2. It will if you're living out of a car or on the streets. You have to have

proof of address to register. The repubs have done a great job of bankrupting just about everyone and everything but the super rich.