Specifically, California would have suffered considerably because of the nature of our housing market. Median home prices are considerably higher and the rise in foreclosures has hit us the hardest. Had the bailout not occur, we could all expect the severity of our housing crisis to get worse. No investors would touch these mortgages as there would be no assurance or security to back them. Many have issues qualifying for jumbo loans nowadays; if there was no bailout, it would have been difficult to even obtain a standard conforming mortgage.

As you know, we already face loan qualifying issues simply because our conforming limits and jumbo loans are struggling to keep up pace with our values. Realistically, Californians should see the bailout as a preventive measure instead of a curing element.

The drop in mortgage rates is a nice outcome, but that should affect borrowers throughout the nation. One thing to remember though is our larger loan amounts will yield higher dollar savings because of lower mortgage rates.

Another thing to lookout for is to see if these lower mortgage rates help to cure some of the hardest hit counties. Places such as Sacramento, Modesto, and other parts of the central valley need the serious help of buyers to offset the excessive inventory of homes.