Rates on 30-year fixed-rate mortgages fell to a record low for the second straight week, causing refinancing applications to surge to the highest level in more than five years, a month after the Federal Reserve pledged to channel billions to prop up the sinking U.S. housing market.
While homeowners around the country are taking advantage of historically low rates to refinance their loans, the opportunity isn’t available to those with poor credit or little equity in their homes, and foreclosures are still likely to surge.
Freddie Mac, the mortgage company, reported that average rates on 30-year fixed-rate mortgages dropped to 5.14 percent this week, down from the previous record of 5.19 percent, set last week. The rate was the lowest since Freddie Mac’s weekly mortgage rate survey began in April 1971 and the eighth straight week of declines.
Crude prices fall again
Crude prices tumbled Wednesday following a raft of bad economic news and growing stockpiles of unused gasoline that suggested demand for energy has continued to erode. Light, sweet crude for February delivery fell $3.63 to settle at $35.35 in a shortened day of trading. Prices fell as low as $35.13 just before the market closed for the holiday. It was the ninth straight day that crude has fallen.
Toyota leadership may change
As Toyota Motor Corp. faces its biggest crisis, speculation is growing that the charismatic grandson of the company’s founder may take over leadership of the automaker sooner than expected. Japan’s nationally circulated Asahi newspaper reported Tuesday that Akio Toyoda – long groomed for the top job – will replace current president Katsuaki Watanabe as soon as April. The newspaper did not cite sources and Toyota denied any decision has been made.
AIG buys $16 billion of CDOs
Insurer American International Group Inc. said it purchased $16 billion of complex financial instruments in an effort to further reduce its exposure to insurance guarantees written against them. AIG bought the investments known as collateralized debt obligations, or CDOs, through a financing company set up by the insurer and the government to help relieve AIG of its exposure to the riskiest portion of the credit markets.
IndyMac sale imminent
Federal regulators are moving to sell the remnants of failed IndyMac Bank before year end, mopping up from the second-largest bank failure this year. It was unclear whether the government would sell off IndyMac as a whole or in pieces, and an announcement wasn’t expected until Friday at the earliest. The lender, which specialized in loans made with little down payment or proof of assets, went under in July.
From wire reports