California -US Businesses BK Filings

 According to the latest statistics from the California Association of Realtors, it looks like Bankruptcy is on the rise as business and individuals struggle to stay afloat. It is amazing how many business depend on the real estate industry.

When you stop and think about it, Banks, Home inspection Companies, Lenders, Appraisers,Title Companies, Escrow Companies, Termite Companies,Landscapers, Contractors, Developers, Real Estate Lawyers, and loss from the slow down also affect Painters, Plumbers,Home Insurance Agencies,Home Protection Companies, Roofers, Tile Companies, Construction supply companies,Architiects, engineers and from there goes the cuts in our housekeepers,gardeners, nannies,tutors gym trainers all have to be let go due to the slowdown in the Real Estate Market.

 Consumer Information from the Car.org.

The number of U.S. businesses and individuals filing for bankruptcy is rising, in part because of tighter lending standards that make it more difficult for small businesses and individuals to stay afloat.   In April, 5,173 businesses filed for bankruptcy, a 49 percent increase from a year ago, reports Jupiter eSources LLC.   Total bankruptcy filings, which include both businesses and individuals, rose 31 percent to 93,096 from the same period a year ago.   Jupiter said it expects total 2008 filings to hit 1.1 million nationally, up from 827,00 in 2007 and 590,000 in 2006.

Last week’s action by the Federal Reserve to cut its key interest rate fell on deaf ears as 30-year mortgage rates hit a seven-week high, according to Freddie Mac.   The reason?  Fears of inflation.  A 30-year fixed rate mortgage averaged 6.06 percent last week, up from 6.03 percent the prior week, the highest level since they reached 6.13 percent in mid-March.    Fifteen-year fixed rate mortgages fell slightly to 5.59 percent, down from 5.62 percent.   The good news for buyers is that rates are still better than a year ago, when a 30-year fixed mortgage averaged 6.13 percent and a 15-year fixed went for 5.87 percent.

Now on the bright side, the interest rates are at a all time low, the money you can save on a$500,000.00 if the rates go up 1% for a 30 year loan comes to the tune of $250.000.00 in interest paid for a 1% increase so if you are waiting for a housing drop of 10% around $50,000.00 on a home of $500,000.00 and you get caught in the rate increases, you will save $50,000.00 but in the long run it will have cost you $200,000.00 if you count the mortgage interest you will be spending.  This is a good example of people being penny wise and pound foolish as my Grandmother use to say.  Don't get caught in the increase, grab these low interest rates now.