February 3, 2012 in Business

Briefcase

 

Mortgage rates fall to another record low

WASHINGTON – The average rate on the 30-year fixed mortgage fell this week to a record low, the ninth time that has happened in the past year. Even with the cheapest rates in history, the housing market remains depressed.

Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan dropped to 3.87 percent this week. That is below the previous record of 3.88 hit two weeks ago.

The average on the 15-year fixed mortgage fell to 3.14 percent, also a record low. Records for mortgage rates date back to the 1950s. For the five-year adjustable loan, the average rate fell to 2.80 percent from 2.85 percent.

Rates have been low for more than a year, and the average rate on the 30-year loan has hovered near 4 percent for more than three months. Yet few people can afford to buy a home or qualify for a loan. Those who can have already done so.

High unemployment and scant wage gains have made it harder for many people to qualify for loans.

Sallie Mae revises how it handles $50 fee

NEW YORK – Private student lender Sallie Mae is changing how it handles a fee it charges struggling borrowers who seek to temporarily suspend payments.

Sallie Mae isn’t canceling the $50 fee, but said it will now apply the money toward the borrower’s loan balance if on-time payments resume for six months in a row.

The change came after an online petition asking the company to drop the fee collected more than 77,000 signatures on Change.org. The site also hosted petitions last year that targeted Bank of America and Verizon; both companies ended up scrapping plans to charge new fees citing widespread public feedback.

Borrowers who are unemployed or suffering economic hardship can apply to temporarily suspend payments on both private and federal student loans. The idea is to keep their credit history in good standing, although the loans still accrue interest.

Federal student loans do not charge to defer payments.

Previously, Sallie Mae did not apply the fees against loan balances. The company says the new policy will be retroactive to forbearances granted Jan. 1.

Jobless applications fall; worker productivity rises

WASHINGTON – The number of people seeking unemployment benefits fell last week to a level that signaled a steadily improving job market. The figures came one day before the government is expected to report that January marked another solid month for hiring.

Unemployment applications fell 12,000 to a seasonally adjusted 367,000, the Labor Department said Thursday. The four-week average, a less volatile measure, dropped for the third straight week to 375,750.

In a separate report, the government said workers were more productive in the final three months of last year. The growth in productivity, though, slowed from the previous quarter. Weaker productivity growth can help boost hiring if economic growth picks up.

Applications for unemployment benefits have steadily declined since fall as economic growth has picked up and employers have cut fewer jobs. The four-week average has fallen 7 percent since last October and 13 percent in the past year.

U.S. says Swiss bank hid assets from IRS

WASHINGTON – The U.S. Justice Department says it has indicted Switzerland’s oldest private bank, claiming it conspired with Americans and others to hide more than $1.2 billion in client assets from the Internal Revenue Service.

Justice officials said Thursday that they also seized more than $16 million from Wegelin & Co.’s correspondent bank in the U.S.

The move comes about a month after U.S. authorities indicted three client advisers at the St. Gallen, Switzerland-based bank on similar charges.

Wegelin has denied violating Swiss law.

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