Homeowners Refinance for Cash
Nearly nine out of 10 homeowners who refinanced their mortgages in the third quarter took equity out of their homes for cash, the highest rate in 16 years, according to a report from Freddie Mac.
Eighty-nine percent of those refinancing their homes took out loans for at least 5 percent more than their original balances, according to the quarterly review of loans owned by Freddie Mac. And the borrowers as a group refinanced to loans with higher interest rates than their old mortgages; the difference was the largest since Freddie Mac began compiling the data in 1985.
Analysts said that reflects an economic climate in which homeowners with adjustable-rate mortgages are switching to loans with higher interest rates. Also, the cost of home-improvement loans and home-equity lines of credit have gone up, making cash-out refinancing more attractive.
Ford to Trim Worker Costs
Ford plans to reduce its expenses for U.S. salaried workers in changes set to take effect June 1, company spokeswoman Marcey Evans said. Ford will require active salaried workers to increase health-care contributions and pay higher deductibles, she said. Ford also will provide salaried retirees and their spouses 65 and older $1,800 each for health-care expenses instead of providing supplemental health insurance beyond Medicare benefits. Ford also will no longer provide supplemental health insurance for dependent children of retirees older than 65, Evans said.
Active salaried employees won't receive merit-pay increases, Evans said, but Ford will reinstate matching contributions for the salaried-employee 401(k) retirement plans.
Manufacturing, Construction Fall
The Institute for Supply Management said its gauge of manufacturing activity fell to 51.2 in October from 52.9 in September, hitting the lowest expansion pace since June 2003. October's decline reflected weakness at companies that supply the auto and housing industries. Separately, the Commerce Department said spending on construction projects dropped by 0.3 percent to a seasonally adjusted annual rate of $1.196 trillion in September. Housing activity fell for a sixth straight month.
Comverse Lawyer to Plead Guilty
Comverse Technology's former general counsel, William Sorin, will plead guilty in the stock options backdating prosecution that has ensnared his onetime boss, fugitive Jacob "Kobi" Alexander, court papers say. Sorin is the second Comverse executive to admit guilt in the case.
Halliburton Agrees to Probe
Halliburton has said it will agree to the Securities and Exchange Commission's request for more time to investigate possible bribery and corruption in connection with natural gas operations in Nigeria. Such an accord will delay when the legal clock starts running on the case under the statute of limitations -- generally five years for such investigations.