A huge issue for banks right now is the liability they face for botched mortgages and faulty foreclosures.

A bevy of private plaintiffs and government agencies have sued for some sort of compensation. Most suits are seeking putbacks, but in the case of the Federal Housing Finance Agency, which was created to oversee the failed GSEs, the suit seeks to be made whole on losses. But it's possible that a creative plaintiffs' lawyer might claim a host of other costs that might include health costs.

Similar to research we've seen on the health effect of unemployment, a study by Janet Currie of Princeton University and Erdal Tekin of Georgia State University looked at longitudinal data in Arizona, California, Florida and New Jersey---four states that were among the hardest hit by the foreclosure fiasco ---from 2005 to 2009 and found that rising foreclosures are associated with rising medical visits for mental health (including anxiety and suicide attempts), preventable conditions and for "a broad array of physical complaints that are plausibly stress-related."

The results suggest that the foreclosure fiasco has hit individuals 20 to 49 years old the hardest and African-Americans and non-white Hispanics. Interesting.

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