MICHELE NORRIS, host:
For quite some time now there's been something wrong with housing. This week, President Bush signed into law a plan that's meant to rescue thousands of people facing foreclosure.
For residents of Stockton, California, that relief can't come soon enough. Stockton has the unfortunate distinction of being the nation's foreclosure capital. An estimated one of every 25 homes is in the process of foreclosure there. Tamara Keith of member station KQED paid a visit to Stockton.
TAMARA KEITH: It's a Friday night, and an exhibit hall at the San Joaquin County Fairgrounds in Stockton has become a makeshift foreclosure crisis center. Representatives from five different lenders are here to meet with borrowers who are in trouble.
Most of the people streaming in and out of the hall hold a folder or an envelope packed with financial documents. They're behind on their payments, have gotten default notices from their lenders, and are desperate to stay in their homes.
Ms. CINDY NAVARRO(ph): Well, you just see whatever they can do for us and help us 'til we get caught up, because we don't want to end up in the street.
KEITH: Cindy Navarro and her husband Manuel(ph) refinanced their Stockton home with an adjustable-rate mortgage a few years ago. Manuel was working as a realtor, and when the housing market went into a freefall, their income dropped too. They recently got a foreclosure notice. He says a lot of his former clients are in the same position.
Mr. MANUEL NAVARRO (Realtor): I can't able to help them, even though they start calling me. I told them, you know, even me, I'm having a bad situation, so how can I help you? I don't even know how to help myself.
KEITH: The new federal housing legislation would offer people like the Navarros the possibility of trading in their troubled mortgage for a lower fixed-rate loan backed by the Federal Housing Administration. But there's a lot of uncertainty in Stockton and elsewhere about how this is all going to work out. First, will lenders participate?
Mr. PAUL LEONARD (Center for Responsible Lending): The projections are very uncertain.
KEITH: Paul Leonard is with the Center for Responsible Lending, a consumer advocacy group. He says it's not clear how enticing this program will be to lenders because they would have to agree to take a loss on the loans. In some cases, it will be their best option.
Mr. LEONARD: It is a big reduction to make. However, you know, the calculation is, is that in any instance, it's going to be less of a reduction than the investor or the lender would have to take if the property goes all the way to foreclosure.
KEITH: Another uncertainty: Who will qualify? Borrowers will have to meet income and credit requirements, so people who have bad credit or could never really afford the home they're in probably won't be helped.
Democratic Congressman Dennis Cardoza represents Stockton and other foreclosure-battered cities in the Central Valley.
Representative DENNIS CARDOZA (Democrat, California): This bill is designed to help some people who are in trouble. It won't help everyone. It is not a big enough fix to take care of the problem in my district, certainly.
KEITH: In this area where foreclosures have taken such a heavy toll, Cardoza says reminders are everywhere, from signs in front yards that say for sale by bank to overgrown lawns and even vandalism. The federal rescue plan is also designed to help this blight.
Unidentified Woman: Washington Mutual number six.
KEITH: Back at the fairgrounds, the Navarros are still waiting for their chance to meet with their loan servicer. All the uncertainty is taking a toll on Cindy Navarro.
Ms. NAVARRO: You know how they say you'll see the - a light at the end of the tunnel? Are we going to see this light ever? I mean, are we ever going to see it? When? You know, sometimes you say okay, maybe it'll get better, but I haven't seen the better yet.
KEITH: The Congressional Budget Office predicts that the new loans will help some 400,000 borrowers nationwide over the next three years. In the same period, more than two million homes are expected to fall into foreclosure. For NPR News, I'm Tamar Keith.
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