Over the weekend the news media reported better than a 10% increase of bankruptcy filings this year in Oregon and Washington State, attributing them to builders, contractors and developers suffering from mortgage market woes.  But I must disagree.  The last 18 months have been increasingly tough for real estate sales and I think the current mortgage conditions were just the final straw. 

I've observed standing inventory in many new developments just sit there for at least a year while the builder continues to build.  Without sales, the builders are just living off the draws of their construction loans and it was only a matter of time before they hit the bottom.  While lenders are analyzing their policies towards mortgage loans they should really take a close look at their construction loans too!