SBA 504 Loan Interest Rates
Official monthly SBA 504 effective interest rate tables can be found at Eagle Compliance LLC. 25- and 20-year term loans fund every month; 10-year term loans fund every other month. Effective interest rates are inclusive of servicing fees, which are subject to credit risk of the applicant.
Spurred by a sputtering U.S. economy, bankruptcy filings are on the rise in 2007, an increase analysts predict will continue. In response, lenders are seeking alternatives to foreclosures in cases where borrowers are able to meet obligations, but borrowers need help.
In the first three months of 2007, business bankruptcy filings rose 60% and consumer filings increased by 70%, compared with the first three months of 2006, according to data collected by Jupiter eSorces LLC, an Oklahoma City company that runs a bankruptcy database called Automated Access to Court Electronic Records (AACER).
The AACER database, which receives daily filing updates from every court in the nation, reports that overall daily filing averages have climbed by 26% since January. On average, 3,316 cases were filed each day last month. AACER categorizes consumer filings differently than the PACER system run by the Administrative Office of the U.S. Courts, which accounts for slight number variations.
As home foreclosures mount, mortgage companies are knocking on doors, sending letters and making phone calls with a simple message for struggling homeowners: They'd rather modify your loan than foreclose on it.
EMC Mortgage Corp., a specialist with a $78 billion portfolio of subprime loans -- for homeowners with weak credit -- this week launched a 50-person team it calls "the Mod Squad." Members will spend an unlimited time on the phone with troubled borrowers, sifting through their bills to compute a workable monthly payment. In an industry that often rewards workers for getting off the phone quickly, the team is preparing to speak to just three people a day.
"You can't just run this like a call center; it needs to be run like a counseling center," said John Vella, president and CEO of EMC. Right now, $2.14 billion in mortgages, 2.74% of EMC's portfolio, is in default, up from 1.93% a year ago. Lenders have long modified loans for homeowners facing job loss, illness, divorce or a death in the family. But with many borrowers across the country struggling to keep up with mortgage payments, mortgage companies increasingly are prodding anyone who's having trouble making payments for any reason to give them a call.
Bankruptcy filings hit an all-time low in 2006, when major corporations enjoyed fat profits and consumer spending was high. Analysts said that drop in filings also reflected a tough new bankruptcy law that took effect in October 2005. The law made bankruptcy an unattractive option for consumers and businesses alike.
The drop, accordingly, was interpreted by some framers of the new law as a vindication of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. In a statement last year, Sen. Charles Grassley, R-Iowa, said "It's fair to say that bankruptcy reform has been a success for our economy."
Many bankruptcy experts, however, argued that a strong rebound in filings was inevitable as the economy lost steam. Experts attribute the current upswing in filings to the skyrocketing rate of home foreclosures and dwindling refinancing rates.
The American Bankruptcy Institute, which gets its information from the Administrative Office of the U.S. Courts, reports a 46% filing increase from January to March. Last month boasted the highest filing rate in a single month since the Bankruptcy Prevention Act and Consumer Protection Act took affect in 2005.
Data from the Alexandria, Va., organization shows a steady increase in filings so far in 2007, with about 50,000 cases filed in January, 55,000 in February and more than 73,000 in March.
"The next boom here is coming, but probably not until late 2007 at the earliest," said Samuel Gerdano, ABI's executive director.
