Foreclosure program may not help California's San Joaquin Valley

Two new foreclosure prevention programs may do little to help Northern San Joaquin Valley homeowners because housing values here have fallen too far.

Foreclosure counseling experts expressed disappointment Wednesday about limits placed on the federal refinancing and loan modification programs.

"They don't address the problem we have here in the valley," lamented Martha Lucey, who runs ByDesign Financial Solutions in Fresno. Her nonprofit agency provides housing counseling throughout the region. "This will only apply to a very small percentage of homeowners in the Central Valley."

Here's the main problem: Home values have plunged 64 percent or more in Stanislaus, San Joaquin and Merced counties since peaking in 2005.

As a result, most of the region's homeowners owe substantially more on their mortgages than their homes are worth.

A just-released study by First American CoreLogic calculated that 51 percent to 55 percent of the region's loans were "upside down" two months ago, and another 4 percent were on the verge of tipping.

The new federal refinancing deal, unfortunately, only is being offered to home-owners whose first mortgage doesn't far exceed their home's value.

"That's not going to help 50 percent of the people in our area. We're almost all underwater," said Edward Parcaut of Lighthouse Residential Mortgage in Modesto. "Even those people who put 50 percent down on a home four years ago owe more than their home is worth now."

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