Credit forcing home builders into bankruptcy
Home builders in metro Atlanta are in trouble, not just because they're not selling enough houses, but because they are having a hard time getting credit from their banks. "We are seeing large numbers of builders that are not able to get extensions of credit to either keep building or hold their inventories," said James L. Paul, business litigation and Chapter 11 reorganization attorney with Chamberlain, Hrdlicka, White, Williams & Martin in Atlanta. "The banks are not able to give extensions to enable the builders to sell off their nventories." Prior real estate busts in Atlanta certainly involved overbuilding and credit restrictions, factors in today's downturn, he said. But the prior downturns with tightening credit really only affected unqualified borrowers. This time, it's different. Read more...