Federal intervention in the financial system could wipe billions of dollars in bad mortgage debt off the books of Wall Street. But will it help end the housing crisis in Sacramento?

Not directly, analysts say.

But eventually it could help curb the defaults and foreclosures at the root of economic problems locally and the nation as a whole.

Housing industry watchers said Friday the plan announced by the White House could lead to easier credit and bring more buyers into the real estate market. That would help stabilize home prices and begin to trim foreclosures by early next year.

The Sacramento region – Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties – recorded more than 21,000 foreclosures from January 2007 through the first half of 2008, according to MDA DataQuick, a La Jolla property researcher.

Some analysts said the government is more likely to modify the troubled loans it assumes, keeping households out of foreclosure.

"I think what we are seeing in this confluence of events could be described in one word: a solution," said Stuart Feldstein, president of SMR Research Corp., a New Jersey lending industry analyst.

Feldstein said that just as falling home prices sparked the foreclosure crisis, rising home values will cure it.

"To the extent that the government takes over the bad debt, banks will have more cash to lend," he said. "They won't have to keep their reserves as high against the bad debt. If a borrower's credit is good and there's a reasonable down payment, it should be much easier to get that loan."

More home buying, combined with falling oil prices and mortgage rates, could help ease pressure on foreclosures, he said.

"It's going to take awhile for people in trouble to get out of it. But we should start to see an improving trend in early 2009," Feldstein said.

Mike Winn, chairman of the North State Building Industry Association, a Roseville-based home builder trade group, seemed less assured. His industry has been decimated since 2006 by layoffs and bankruptcies.

"It's helpful to the extent that we've moved all the subprime securities from bad private debt to bad public debt. It doesn't make the problem go away," he said. "Just because mortgages are held by a public agency, the foreclosure issue will remain just as bad."

Some experts, including Kevin Stein, associate director of the California Reinvestment Coalition, hope the federal government might modify troubled loans in its new debt portfolio. Stein cited quick moves by the Federal Deposit Insurance Corp. to modify mortgages when it took over failed Pasadena-based IndyMac Bank.

"If a new entity, somehow controlled by government, does a better job, the benefit will be to homeowners, investors and taxpayers," said Stein.

Chapman College law professor Kurt Eggert said the bailout "only makes sense" if it includes loan modifications.

"What the feds need to do is aggressively modify them, and make them affordable to the borrowers. That could have an immediate effect on the foreclosures. I think this has to be their goal," he said.

"I think there will be growing pressure on them to do that."

Gold River mortgage broker Jim Paterson said that with so many details yet to be determined, it's too early to predict what effect the bailout will have on Sacramento-area housing.

"I don't think you could talk to anybody who could say, 'This is the way it is and this is the way it's going to stay,' " said Paterson, a partner in Mortgage Consultants Group.

Call The Bee's Jim Wasserman, (916) 321-1102. Read his blog on real estate, Home Front, at www.sacbee.com/blogs.