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Business Digest: Mortgage delinquencies up at Fannie Mae and Freddie Mac

Saturday, January 9, 2010; A08

MORTGAGE FINANCING

Delinquencies up at Fannie and Freddie

Delinquent home loans at government-controlled mortgage finance giants Fannie Mae and Freddie Mac surged 20 percent from July through September, according to a new report by the companies' regulator, the Federal Housing Finance Agency.

Almost 1.6 million borrowers had not made their mortgage payments for at least two months. That's about 5.18 percent of all borrowers. Year over year, the number of delinquencies more than doubled.

The regulator said the rates were increasing in part because of "continued deterioration" in the companies' businesses "as home price and economic conditions remain challenging."

But it also said that District-based Fannie and McLean-based Freddie are taking steps to delay foreclosures, which may prolong payments as borrowers try to use government programs meant to make it easier to adjust the terms of their loans.

-- Zachary Goldfarb

ALSO IN BUSINESS:

-- Consumer borrowing falls sharply: Americans borrowed less for a 10th consecutive month in November, with total credit and borrowing on credit cards falling by the largest amounts on records going back nearly seven decades.

The dramatic declines raised new worries about whether consumers will cut back further on spending, making it harder for the economy to rebound.

The Federal Reserve said total borrowing dropped by $17.5 billion in November, a much bigger decline than the $5 billion decrease economists had expected.

-- Foot Locker to cut jobs as it closes 117 stores: Shoe and accessories company Foot Locker said it plans to cut about 120 jobs and to have closed 117 stores by the end of this month as it looks to become a more efficient and competitive business.

The company said the job cuts would come in its home office and field management operations. It did not say in a news release what stores would be closed. Calls to a company spokesman for comment were not immediately returned.

-- Best Buy bounces back: After a disappointing sales decline in December 2008, Best Buy had a strong showing in December 2009, with total sales climbing 13 percent, to $8.5 billion, as consumers bought electronics ahead of the holidays. Sales in stores open at least a year rose 8.2 percent after declining 6.5 percent the prior December.

-- China surpasses U.S. in 2009 auto sales: China overtook the United States as the biggest auto market in 2009 and automakers should see more strong growth there this year, an industry group reported.

Boosted by Beijing's government stimulus funding, 2009 passenger-car sales soared to 10.3 million and total vehicle sales are estimated at 13.6 million, the China Passenger Car Association said. That represents growth of 45 percent from 2008.

By contrast, U.S. sales of cars and light trucks plunged 21 percent, to 10.4 million. It was the first time any country bought more cars than Americans.

-- Prius hits No. 1 in Japan: The Toyota Prius is so sought-after in Japan, it has become the first gasoline-electric hybrid vehicle to top annual sales.

The Japan Automobile Dealers Association said 208,876 Prius cars were sold in 2009, nearly three times the number sold the previous year.

-- From news services

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