The People of the State of California Are About to Officially Go Crazy

h/t to Mark Perry for this.

The State of California allows constitutional amendments to be created by votes of its citizens in an election process. Using this method, if enough people sign the petitions, and the voters pass it, the following will become law in California.

Here is some of the language below from a ballot proposal in California called the “Foreclosure Modification Act,” 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.

  • 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.)

Here’s a news report about this amazing citizen’s initiative.

Take a moment to think through the consequences of this initiative. What lender would ever agree to loan a homeowner in California money to buy a home, if it’s quite likely that the loan amount could be reduced through no fault of their own? What interest rate do you suppose a lender would have to charge to make up for the potential to have their assets reduced in value by a third party? With the ability to foreclose taken away, why would any home owner pay any of their loan back? This is so stuck on stupid, that it just might pass.

Beware the tyranny of the majority.

Not Ready For Prime Time
  • Anonymous

    Actually, I think this is funny as hell.  NO ONE is going to lend under these ridiculous “laws”.  But just think of the liberal idiocy that this represents.

    They’ll drive construction right out of the state.

  • And the citizens of California are not crazy already?
    [P.S.: I have in-laws living in California, but they are Republicans.]

    • My brother in California nearly lost his house last year. I’m reasonably confident he’d avoid trying to get another mortgage if he can possibly help it.

      I’m also fairly confident if he ever does have to take out another mortgage it won’t be in California.

  • Anonymous

    This is crazier than the “I want to go back to Africa for the free electricity” woman in the video posted a few days ago.

    • Anonymous

      All she really has to do is move to California and buy a house, she’ll be all set.

  • Anonymous

    Time for some community organizer to put down the trap rake and gesture the kiss of death to Kalifornia..

  • Welcome to the USSRSoC

    (For those that can’t figure it out: United States Socialist Republic State of California)

  • Anonymous

    I am starting to wonder if Ayn Rand was literally a divine prophet. OK, a sometimes appallingly turgid and bloviating one, but a prophet nontheless. A long-winded Nostradamus.

    I am stunned daily by how much of this s–t she called, straight down the line, 100%.

    And not one of these California “leaders” has read a word of it. That goes without saying.

    • Anonymous

      Be afraid, very, very afraid. It is coming true chapter by chapter and boy does it ever suck having to watch it go down. Nanny state politicians will be the downfall of this country with their legislation that strips freedoms away law by law.

      CA is dominated by Democrat progressives who want nothing more than to be able to legislate every facet of daily life the way they want you to live it. California power tripping…

  • Anonymous

    Is it too early to recall the constitution?  I am having a hell of a time understanding why these ‘commiecrats’  are not being tarred and feathered in public square[s?

  • John H

    More power to them. Let each state be a laboratory to experiment with the political ramifications of different ideas. Meanwhile, in Texas we won’t be this foolish and we will continue to add jobs.

    • Anonymous

      Kudos’ Its like the civil war all over again. Only this time the Confederacy is going to win.

  • Anonymous

    On the plus side, property prices in Santa Monica, Malibu, and Santa Barbara will plunge. For those of us with enough cash to buy it. For those of us willing to invest in California real estate.

    • Anonymous

      I think I’ll sit-it out through a few more cycles of property re-appraisals before I scoop up some coastal properties. Prices will only get better for the buyer.

  • Anonymous

    Well, it explains why so many of these props end up in the courts and thrown out.

  • At the rate they are going, falling into the Pacific may be about the best outcome California can hope for.

    Maybe if they all jump up and down at the same time . . .

  • Anonymous

    If “home ownership [becomes] a fundamental right for every Californian,” like voting, will the purchase price of a house become unconstitutional, like a poll tax? 

  • Anonymous

    This will trigger the law of “unintended consequences”.  

  • Anonymous

    Ok…I am seriously wondering how in hell this will be regarded as constitutional.  The supremacy clause does mean that the US Constitution does still serve as the supreme law.  And as much as the commerce clause is rightly vilified for its excesses, you can not make a cogent and coherent argument that any interstate bank would be bound by this… this…excremental stupidity.  What this will do is crush credit unions and local banks.  Which may be the point of this little exercise anyway.

  • Anonymous

    OMG, look at all the water leaking in the boat.  Quick, drill some holes to let it out!

  • Anonymous

    This sounds like the real estate depression in California will be empty bank buildings. Not to worry, Obama will save them from this self-made crisis. Krauthammer will give us his patented tsk, tsk, and the GOP will do nothing to stop him.

  • Anonymous

    Certain lending regulations make sense.  Off the top of my head, perhaps limiting the amount of mortgage proportional to the value of the home (say, 80 percent … works for Texas, IIRC).  Or perhaps better disclosures (though I’m not sure the current ones are inadequate).

    But this … ick.  The problem is not foreclosures.  The problem is that certain mortgages were issued in the first place.  

    That said, with housing values plummeting, somebody has to take the haircut.  And IMO, that haircut starts with the borrower who took out a mortgage he couldn’t afford … and the originating bank that foolishly lent him money it should not have offered.