(02-22) 17:57 PST -- More than 90 percent of Bay Area mortgage holders cannot qualify for the low-cost refinances included in President Obama's housing rescue package, according to an analysis of loan data from real estate service Zillow.com. That is the smallest percentage of people eligible for the refinances anywhere in the country, Zillow said."The Bay Area is being hit by the fact that it's high-priced, and therefore the loans that were made around the peak years were not conforming (meaning they were above $417,000), and secondly, that (the housing market) has gone into such sharp decline that many homes are underwater by more than 5 percent," said Stan Humphries, vice president of data and analytics for Zillow in Seattle. key component of the White House plan calls for assisting homeowners whose home equity has dwindled by letting them refinance into lower-cost mortgages, potentially saving them hundreds of dollars a month and reducing the risk that they may one day lose their homes to foreclosure.
5 percent underwater
But that initiative is only available to people who took out so-called conforming loans of less than $417,000 and whose homes are not more than 5 percent underwater - meaning what they owe is not more than 5 percent greater than their home's value. For instance, someone with a home now worth $300,000 who owes $315,000 could qualify for the refinance - but would be barred if the home's value dropped further. n the San Francisco metropolitan region - comprising San Francisco, Alameda, Contra Costa, Marin and San Mateo counties - just 8.4 percent of all mortgaged homes meet those criteria, according to Zillow. In the San Jose metropolitan area (Santa Clara County), only 6.9 percent of mortgaged homes would qualify. In Napa County, 8.8 percent of mortgage holders would qualify. y contrast, more than one-quarter of all U.S. mortgaged homes meet the two basic qualifications for the refinances in terms of mortgage size and the loan-to-value ratio, Zillow said. In some lower-cost areas of the country, such as Memphis, Dayton, Ohio, Fort Collins, Colo., and New Orleans, more than 44 percent of mortgaged homes would qualify, Zillow said. The Bay Area numbers were higher in two outlying - but much less populated - areas, but still far below the national average. In the Santa Rosa-Petaluma area (Sonoma County) 12 percent of mortgage holders would qualify, according to Zillow, and in Vallejo-Fairfield (Solano County), the number was 17.6 percent. Both areas, especially Vallejo, have suffered a significant foreclosure crisis and seen home values plunge, but they are sufficiently low-cost that presumably more people bought homes with mortgages less than $417,000.SOURCE:SFGATE.COM
