During that time, interest can build on the debt at the default rate stated in the original mortgage. That’s usually four or five percentage points above the original mortgage rate, so a deficiency on even a low 6-percent loan would be charged 10 percent or 11 percent interest, doubling the cost of the debt in as little as six and a half years.

O’Connor reports that one of the biggest problems is bottom-feeding collections agencies buying bad debts for pennies on the dollar.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.