Bailing

The numbers are staggering. One in every four Sonoma County homeowners owes more on their mortgage than their home is worth.

Half of all homes in Sonoma County purchased in the past year were sold at a loss. Only Solano (62 percent) and Contra Costa (59.3 percent) counties fared worse in the Bay Area.

But in some parts of the county, including southwest Santa Rosa, the figure is closer to 70 percent. These gloomy statistics were put out this week by Zillow.com, a real estate-focused Web site.

For those with stable jobs and fixed-rate mortgages, being "under water" is more of a mental challenge than a financial one. It most likely will only become a factor if the homeowner wants or needs to sell.

Still, knowing that you owe more money than your house is worth dampens perceptions of one's wealth and mobility, which, as witnessed in recent days, can play havoc with financial markets. Pessimism prevails these days.

The good news is that help may be coming on a couple of fronts -- at least for some.

First, the government and the mortgage industry announced this week that they will be teaming up to renegotiate hundreds of thousands of delinquent loans now being held by Fannie Mae and Freddie Mac. The Federal Housing Finance Agency, which seized control of Fannie and Freddie this summer, announced that the program will take effect on Dec. 15.

Homeowners who qualify will have access to a variety of programs ranging from reduced loan rates to an extension on loans from 30 years to 40 years.

To qualify, borrowers would need to be at least three months behind on their payments and owe at least 90 percent of the current value of their home.

The problem is that this doesn't help many of those caught with subprime mortgages as well as jumbo loans -- which are abundant in high-priced areas such as California -- which Fannie Mae and Freddie Mac don't buy or back.

This program is a good start, but to be effective, particularly in areas such as Sonoma County, federal authorities will need to find a way to extend it to the 40 percent of U.S. mortgages not covered by Fannie and Freddie.

That brings us to the second relief opportunity -- the federal bailout. This help is coming. But the quest for clarity took a step back this week with Henry Paulson's announcement that the Treasury no longer plans to buy troubled assets directly from financial institutions. Instead the Treasury will use some of the $700 billion in federal bailout funds approved by Congress to infuse banks and other lending institutions with the money they need to issue college, car and home loans.

The credit markets could certainly use the cash. But this is not what consumers were expecting when this bailout was approved. It's also unclear how and when this would help homeowners and other consumers in places such as Sonoma County. The details are still being worked out.

Programs that free up funds to allow qualified homebuyers to buy properties now on the market are as much needed as programs that help homeowners stay in their houses. But what's needed more than anything are specifics and timetables -- so consumers can plan for the best while they they live through the worst.