From the source in Business Law Daily,
California could ban lender-initiated home foreclosures, under a proposed amendment to the state’s constitution that would make home ownership a fundamental right.Wait. Whut???
The Foreclosure Modification Act, a proposed citizen’s initiative, would ban mortgagees from foreclosing on owner-occupied dwellings in the Golden State. It would further require banks and other lenders to help mortgage borrowers struggling amid financial hardship or illness.Well, that's perfect! Home ownership is a fundamental right - not just a place to live like the glorious soviet apartment buildings: home ownership. What could possibly go wrong here?
Additionally, lenders would be required to reduce loan principal amounts to reflect a drop in local property values of at least 10 percent. Payments would be adjusted without a new credit review, the proposal states.
I mean aside from everything.
No company would ever offer a mortgage for sale in California again. Why would they, if there's almost an ironclad guarantee they'll lose money? If there's no possibility of being kicked out of your home, and if the bank has to throw away money and re-finance you, why even pay the mortgage? How could this possibly result in any positive outcome? Wait. I know. It's the unicorns (for Sept. 3).
read the whole thing.