As of June 17, the Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan dropped 16 percent to 514.4 in the week ended June 12, from 611 the prior week.

 

This level was seen previously in November 2008.

 

What this means is consumers are no longer confident that their houses are value-stabilized and not worth the effort to use as security for additional borrowing.

 

Businesses that rely on financing may shortly find their own problems borrowing. 

 

American Express wrote off 10 percent of managed U.S. card loans according to their recent June 15 report.

 

So, businesses must continue to be vigilant on their receivables and insist on more and greater deposits before their efforts go unrewarded.

 

Most importantly, the need to assess the product and service offerings must be undertaken by all business.

 

When a client asked us to review their product line-card, we also asked for a management report on the cost breakdown of all the products.  Then, we asked to consult with their internal cost accountant since it did not appear that the COGS was telling us enough to help assess the profitabiltiy of the goods.

 

Ultimately, we choose to recommend a cross tabulation of the customer purchase history to over-lay the product profits to see the true value of the customers and their specific purchases.

 

By doing this, instead of just making a recommendation based on historical costs, we were able to bring a six percent overall increase in gross profit with our suggestions on changing the product mix.