SAN FRANCISCO — The president’s $75 billion plan to keeping the housing market from eating it (see SF Gate story) 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 available only 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 depreciated only 10 percent in San Francisco and Marin counties, compared to, say, the Central Valley’s 50 percent.
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