Analyst: Why California won’t get much housing relief

The Obama administration’s plan to stave off foreclosures could fall flat in California, where nearly one-third of mortgage holders are underwater on their loans -- many of them by amounts that would disqualify them for government-sponsored refinancing.The problem is likely to be especially acute in areas like the Inland Empire, where homes have lost more than 40% of their value in the last year and nearly half the homeowners owe more on their loans than the properties are worth. ‘They’re underwater by six figures in many cases,’ said Greg McBride, a senior analyst with Bankrate.com. ‘Many homeowners in Southern California are left to twist in the wind.’Under the Obama plan, people who are current on their mortgages could obtain new loans with lower rates for as much as 105% of the value of their homes. That means people could borrow $315,000 against a home worth $300,000.The problem is that, in California, many people owe far more than 105% on their homes, McBride said.