Vallejo is the Bay Area’s version of ground zero for the subprime loan crisis.

A significant number of residents of the largely blue-collar city of 120,000 have taken out subprime loans — expensive mortgages issued to people with poor credit.

In 2005, almost one-quarter of mortgages in the Vallejo-Fairfield metropolitan area were subprime loans, according to the Center for Responsible Lending’s analysis of Home Mortgage Disclosure Act data.

Vallejo home prices fell 8.5 percent from November to March, according to DataQuick Information Services. For people who bought in recent months without putting any money down, that means they may owe more on their mortgage than the house is worth.

THE SUPREME COURT’S 2005 Kelo ruling upholding government power to seize peoples’ houses and turn them over to private developers sent a chill through homeowners. It also sent a thrill through property rights activists who saw an opportunity to hitch the more radical parts of their agendas to ballot measures advertised simply as protection against home-stealing developers and politicians.

Last November, for example, California’s ballot included a measure to block Kelo-like eminent domain but also, by the way, to effectively end basic zoning and environmental regulation. Fortunately, voters saw Proposition 90 for the Trojan horse that it was and rejected it.

With rising numbers of credit-stressed mortgage borrowers falling behind on their payments, will Congress step in and throw them a lifeline?Will it transform the most consumer-friendly home mortgage program for moderate-income buyers into a serious alternative for refinancers heading for default and foreclosure in high-cost communities coast to coast?

Both questions put the spotlight on major legislation pending on Capitol Hill — the long-awaited modernization of the Federal Housing Administration’s mortgage insurance programs. The House Financial Services Committee passed a reform bill this month, and the full House is expected to take it up in June. Then it’s over to the Senate, where similar legislation crashed and burned late last year.

According to Remodeling magazine’s “Cost vs. Value Report” in 2002, the payback on improvements was measured by comparing the costs of various types of projects in the nation’s top 35 markets to home values. A panel of more than 200 real estate agents and appraisers participated.

Nationally, the results showed that homeowners recover about 80 percent of home improvement costs through an increase in the home’s worth. In hot markets, the increased value of the home may exceed improvement costs.

Generally, homeowners recovered nearly 90 percent of costs for remodeling bathrooms, 67 percent for kitchens, 75 percent for master suites and 79 percent of basement remodels.

I read a lot of books on real estate, and most are only marginally useful. Many are by experienced writers who don’t truly understand the topic but get published anyway. Others are by knowledgeable authors, but their lack of writing skills makes their books hard to use or difficult to read.

This week I’m happy to report on the new book “About the House With Henri de Marne: How to Maintain, Repair, Upgrade and Enjoy Your Home” (Upper Access, $16.95). De Marne’s book would make a good gift, especially for a first-time buyer.