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The percentage of households that could afford to buy an entry-level home in California stood at 67 percent in the second quarter of 2009, compared with 49 percent (revised) for the same period a year ago.

First-time Buyer Housing Affordability Index (FTB-HAI) measures the percentage of households that can afford to purchase an entry-level home in California. The Index is the most fundamental measure of housing well-being for first-time buyers in the state.

The minimum household income needed to purchase an entry-level home at $224,180 in California in the second quarter of 2009 was $39,930, based on an adjustable interest rate of 4.92 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $1,330 for the second quarter of 2009.

At $39,930, the minimum qualifying income was 34 percent lower than a year earlier when households needed $60,460 to qualify for a loan on an entry-level home. Recent decreases in home prices and mortgage rates have brought affordability into better alignment with income levels of the typical California households, where the median household income is $61,030.

One in five people who receives credit counseling before filing for bankruptcy cites avoiding foreclosure as the primary reason they are choosing bankruptcy, according to information collected by Consumer Credit Counseling Service.

In June, the national nonprofit financial counseling agency found that 3,620 persons or 21.6% of the 16,744 people who received pre-filing bankruptcy counseling planned to file for bankruptcy to avoid foreclosure. The agency collected information about the connection between bankruptcy and foreclosure in April, May and June 2009. The decision to file for bankruptcy to avoid foreclosure appears to be a consistent trend during that period.

In May, the agency provided pre-filing bankruptcy counseling to 16,038 Americans. During that month, 3,464 persons, or 21.6% of the total, cited avoiding foreclosure as the reason to file for bankruptcy. In April, CCCS of Greater Atlanta provided pre-filing bankruptcy counseling to 17,603 individuals and 20.4% of those counseled, or 3,598 persons, stated that avoiding foreclosure was the reason for choosing bankruptcy.

Research shows that tens of thousands of Americans are turning to bankruptcy to avoid foreclosure. Homeowners should call for assistance from a nonprofit counseling agency as soon as they feel they are going to have trouble meeting their mortgage payments. Free help is available from many agencies across the country. A professional counselor can help struggling homeowners explore all options available to them and connect them with their mortgage servicer if necessary.

Any person seeking to file for bankruptcy protection is required to receive credit counseling.