California is going to ban foreclosures, at least some Californians hope so. Capitalism cannot survive if lenders cannot function. Have they officially lost all of their marbles in the peoples Republic of California?
Business Law Daily reports that California could ban lender-initiated home foreclosures, under a proposed amendment to the state’s constitution that would make home ownership a fundamental right. In California, constitutional amendments can be created by votes of its citizens in an election process. If they get enough signatures on a petition and it’s passed, it becomes law.
This particular proposal, known as the “Foreclosure Modification Act,” is scheduled to go on the November 2012 ballot if supporters get the required minimum 800,000 voter signatures. It was approved in late July by the California attorney general for signature collection.
Here are some of the mandates –
- Makes home ownership a fundamental right for every Californian.
- Prohibits lenders from foreclosing on any California citizen’s personal home.
- Requires lenders to assist California borrowers not making payments on home loans due to financial hardship or illness.
- Requires lenders to reduce mortgage principal to reflect any drop in local property value of more than 10 percent, and to reschedule payments, reduce interest rates, and/or refinance without new credit review.
- Requires lenders to refinance home loans at a minimum cost within 45 days of request if loan has been maintained for three years.
- Provides back property tax assistance to homeowners from local governments (counties, cities, townships, etc.)