Companies bid to tap Gulf oil

Energy companies bid hundreds of millions of dollars Wednesday to explore for oil and natural gas beneath 1.8 million acres in the western Gulf of Mexico, while looking forward to the possibility of future drilling in federal waters now off-limits.

The results of the lease sale – the first since offshore drilling emerged as a key campaign issue after gasoline prices topped $4 a gallon – only muddied the waters as to how much politics can really influence oil production, and by extension, energy prices.

While firms bid $487.3 million to win the rights to drill 319 tracts of the Gulf, most in deep water, 90 percent of the area put up for sale Wednesday did not receive a single bite. Most of the leases purchased came with 10-year terms, unlikely to influence prices now.

WASHINGTON

Plan set for IndyMac borrowers

Thousands of troubled home borrowers with loans from IndyMac Federal Bank will be able to switch to fixed-rate mortgages under a new plan from federal regulators, who seized the bank last month after it became the largest regulated thrift to fail.

Most IndyMac borrowers who are seriously delinquent or in default on their mortgages and can document their situation will be able to switch into loans capped at an interest rate around 6.5 percent, the Federal Deposit Insurance Corp. said Wednesday.

The average U.S. rate on 30-year, fixed-rate mortgages was at 6.52 percent last week, unchanged from the previous two weeks.

NEW YORK

Mortgage applications fall

Mortgage application volume fell last week to its lowest levels in nearly eight years, the Mortgage Bankers Association said Wednesday.

The fall in application volume is the latest sign of a struggling housing market. On Tuesday, a Commerce Department report showed construction of homes and apartments fell in July to the lowest level in more than 17 years.

And while fewer new homes are being built, fewer customers are refinancing existing mortgages. A sharp drop in refinance volume in recent weeks has been the leading driver of declining application volume.

From wire reports