The Obama administration is cutting mortgage-insurance premiums charged under a government program popular with first-time home buyers with little money for a down payment, a move that may ease the burden of rising interest rates.
The annual fees the Federal Housing Administration charges to guarantee mortgages it backs are being cut by a quarter of a percentage point, the Department of Housing and Urban Development said Monday. With the reduction, the annual cost for most borrowers will be 0.60 percent of the loan balance.
The change will force Donald Trump’s incoming administration to weigh Republican objections over lower fees against the benefits to home buyers. Republicans have argued that reductions put taxpayers at risk by lowering the funds the FHA has to deal with mortgage defaults.
HUD said Monday the fee cut will save new FHA-insured homeowners an average of $500 this year. It will take effect Jan. 27.
— Bloomberg News
Yahoo chief executive Marissa Mayer is among six directors who plan to leave the board of the investment company that will be left after the closing of the proposed sale of Yahoo’s main Internet properties to Verizon Communications.
The new company, a shareholder in Alibaba Group Holding and Yahoo Japan, will change its name to Altaba and reduce its board to five members as it looks ahead to its next chapter with fewer ties to the iconic brand, according to a filing Monday.
Yahoo agreed to sell its Web properties to Verizon in a deal valued at about $4.8 billion, though questions have come up after Yahoo revealed two separate hacks of user data. The deal came after Mayer failed to deliver on a turnaround attempt that began after her arrival in 2012.
The directors who will remain with Altaba after the closing of the Verizon sale are Tor Braham, Eric Brandt, Catherine Friedman, Thomas McInerney and Jeffrey Smith. Brandt was named chairman Monday.
Others, including David Filo, co-founder of Yahoo, and Maynard Webb, who had been chairman, intend to leave after the planned sale of the Web services to Verizon.
— Bloomberg News
● A Volkswagen executive was charged Monday with conspiracy to defraud the United States over the company’s diesel emissions cheating. Oliver Schmidt, who was general manager in VW’s environmental and engineering office in Michigan, did not enter a plea at an initial appearance in U.S. District Court in Miami and was ordered held pending a hearing Thursday by U.S. Magistrate Judge William C. Turnoff. He is accused of failing to disclose a cheating device used to rig U.S. diesel emissions tests from 2006 through 2015.
● McDonald’s has agreed to sell a controlling stake in its China and Hong Kong operations to a group of investors for about $1.7 billion. Chinese state-backed conglomerate Citic Ltd., Citic Capital Holdings and U.S. private-equity firm Carlyle Group will acquire an 80 percent holding in a deal valuing the business at as much as $2.08 billion, according to a statement Monday. McDonald’s will keep the remaining stake. The new owners plan to add more than 1,500 restaurants over the next five years in smaller Chinese cities.
● UnitedHealth Group will buy Surgical Care Affiliates for about $2.3 billion, adding an outpatient surgery chain to its growing health-care-delivery business. UnitedHealth will pay $57 a share, with 51 percent to 80 percent of that in stock and the rest in cash, the companies said in a statement. Surgical Care, which has 205 facilities, will be combined with UnitedHealth’s OptumCare unit.
● Consumers increased their borrowing in November at the fastest pace in three months. Total borrowing in November climbed $24.5 billion, compared with $16.2 billion in October, the Federal Reserve reported Monday. The increase pushed total debt to a fresh record of $3.75 trillion. The increase reflected a big jump in the category that covers credit card debt, which rose $11 billion. Growth in the category that covers auto loans and student loans slowed a bit in November, showing a rise of $13.5 billion after a $13.8 billion increase in October.
● Two major prescription drug distributors have agreed to pay $36 million to settle a West Virginia lawsuit alleging they fueled the state’s opioid epidemic with excessively large shipments of painkillers into the state over several years. State officials on Monday said Cardinal Health will pay $20 million and AmerisourceBergen will pay $16 million under the terms filed with Boone County Circuit Court. The companies have denied any wrongdoing.
— From news services
● 10 a.m.: Commerce Department releases wholesale trade inventories for November.
● 10 a.m.: Labor Department releases job openings and labor turnover survey for November.