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July 24, 2008 11:14:59 PM CDT

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Mortgage Meltdown Hits Small Builders

Posted Mar 21, 08 3:00 AM CDT in Business,  US 

(Newser) – The housing market collapse that's sending homeowners into foreclosure is starting to hit small- and medium-size builders left with developments they're unable to sell, the Wall Street Journal reports. Buyers are canceling contracts and builders are missing mortgage payments on often highly leveraged projects. Small regional banks, in turn, could be the next victims.

The government's move to make more credit available through Freddie Mac and Fannie Mae may be too late to prevent a wave of bankruptcies. "Even rock-solid, generational businesses are taking desperate measures," the head of an industry association tells the Journal. Huge firms with deep pockets will be best able to weather the crisis and a wave of consolidation is expected.

Source Wall Street Journal

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Workers build a new homes at a housing complex in Palo Alto, Calif. in this Aug. 16, 2007 file photo.   (AP Photo/Paul Sakuma, file)
Housing is under construction in Raleigh, N.C. in this Dec. 6, 2007 file photo.   (AP Photo/Gerry Broome, file)
Construction workers frame a new house in Gilbert, Ariz. in this Aug. 31, 2007 file photo.   (AP Photo/Matt York, file)
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housing market  • subprime crisis  • foreclosure  • mortgage crisis  • mortgage  • banking  • bankruptcy  • construction  • small businesses  • homebuilders  • residential building


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