Little Help Here? California Needs More Housing Help

Wednesday, Jul 29, 2009  |  Updated 6:59 AM PDT
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Little Help Here? California Needs More Housing Help

Will the mortgage rescue plan be any good in the Bay Area?

The president's $75 billion plan to keeping the housing market from eating it (see: news) is said to have special significance in California, the "epicenter of boom-and-bust real estate."

The three-fold plan has two parts that are good for us, and one part that kind of fails us. The first two: loan modifications, and more capital for Fannie and Freddie so they can reduce mortgage rates.

But the third, low-cost refi for homes losing value, is only available to mortgages of less than $417,000— which instantly prices out a great many California homes, and suggests a tweak to a sometimes Curbed feature: from the Under 500 Club to the Under 417 Club.

In all seriousness, though, fully 60 percent of 2005-2006 loans in the Bay Area would be ineligible for the refi. Luckily (?), the Bay Area's prices have only depreciated 10 percent as a whole, compared to, say, the Central Valley's 50 percent.

 

Copyright © 2009 Curbed SF

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