Sacramento, CA – August 3, 2011 – From “The Great State of Insanity”, California, an amendment to the states constitution is being proposed that would outlaw all foreclosure activity and require all lenders to reduce principal balances and reduce interest rates within 45 days of request without credit review or penalty.
Declaring that “real estate lending institutions have failed to provide a simple method of loan modification and foreclosure prevention,” David A. Benson’s Foreclosure Modification Act would require lenders to provide principal reductions and interest rate reductions to help borrowers keep their homes.
Benson asserts that loan servicers are “not taking into account the devalue that has occurred in property values,” and thus, his amendment would require lenders and servicers to offer refinancing options with lower interest rates to all homeowners.
According to the amendment, any home loan “shall be able to be refinanced without credit review or penalty at minimum cost, within 45 days of being requested by the original loan borrower or home owner” given the borrower has maintained the loan for at least three years.
“It is a fundamental right for every Californian to purchase and own a home and real property,” the proposed amendment states. “As such no township, city, county, municipality, corporate entity, the Legislature or agents thereof shall infringe on this given right of the State of California to its citizens.”
The proposal, already cleared by the Honorable Kamala D. Harris Secretary of State and former San Francisco District Attorney, now requires 807,615 signatures — 8 percent of the total votes cast in California’s 2010 gubernatorial election — in order to be listed on the ballot for California voters to consider.
Benson has until December 27 to collect the signatures.
A nonpartisan legislative analyst and the California governor’s director of finance say the amendment might conflict with the U.S. and California Constitutions and other federal laws, according to an article in the Central Valley Business Times.
While legal hurdles could be encountered in opposition to its implementation, don’t be surprised if this becomes a state proposition and passes. This is after all California.