MORTGAGE

U.S. mortgage applications fell for a second consecutive week, reflecting a drop in demand for home purchase and refinancing loans even as interest rates sank, an industry group said on Wednesday.

CIT Group Inc, the consumer and commercial finance company, on Tuesday said it has closed its mortgage lending operations, the latest to abandon the sector amid difficult market conditions.

Bhaviesh and Varsha Shah bought their dream home in a new development east of Los Angeles two years ago, planted flowers around an emerald lawn and picked out wicker furniture for sitting outside on cool afternoons.

Private mortgage insurance firms that saw their business shrivel during the subprime lending bonanza of 2005-2006 are set to win back market share if they can weather the current mortgage crisis.

The U.S. mortgage and credit crisis deepened on Wednesday, as Accredited Home Lenders Holding Co, HSBC Holdings Plc and Lehman Brothers Holdings Inc announced a total of 3,400 job cuts, as concern mounted about the longer-term impact on the economy.

The Federal Reserve's attempts to provide liquidity in the past few days are not reaching the players who need it since they cannot borrow directly from the central bank, leaving the $7.2 trillion U.S. mortgage bond market struggling to clear the volumes being offered.

Toll Brothers on Wednesday reported sharply lower quarterly profit amid tightening credit standards that the builder said would likely to shrink the number of potential home buyers.

Accredited Home Lenders Holding Co said on Wednesday it has stopped taking loan applications and will cut 1,600 jobs, citing turmoil in the subprime mortgage industry. Accredited said it will close substantially all of its retail lending business, consisting of 60 branches and five central support operations.

Marsh Inc. the world's largest insurance broker and risk adviser, on Monday warned financial institutions they may face more claims as a result of the subprime mortgage crisis.

Home foreclosures rose 9 percent in July from June and soared 93 percent from a year ago as states that once enjoyed a white-hot housing market are now seeing the greatest number of loan failures, a real estate survey reported on Tuesday.

Stocks fell on Monday, led by losses in financial companies, as worries about spillover from the subprime mortgage market lingered despite the Federal Reserve's surprise discount rate cut on Friday.

Struggling mortgage investor Luminent Mortgage Capital Inc and home loan lender Thornburg Mortgage Inc took steps to bolster liquidity on Monday, but the companies signaled the trouble is not completely gone.

Mortgage lenders' and financial companies' debt insurance costs fell on Monday, continuing improvements from Friday when a Federal Reserve discount rate cut sparked a rally in most global markets.

Mortgage lender Thornburg Mortgage Inc said on Monday it sold $20.5 billion of assets and reduced its borrowings to cut its risk amid a difficult market for home loans.

On the same December day Merrill Lynch & Co. Inc. paid $1.3 billion for a subprime lender, the world's largest brokerage got a rude introduction to risky mortgages.

A crisis in credit markets triggered by a collapse of the U.S. subprime mortgage market has shuttered several mortgage real estate investment trusts and threatened the sector, rekindling memories of a similar crisis 30 years ago.

Bear Stearns Cos Inc said on Thursday it will cut about 240 subprime lending jobs as a global credit squeeze and a subprime lending crisis rattles markets.

First Magnus Financial Corp., one of the largest independent U.S. mortgage lenders, said on Thursday it has stopped funding home loans and taking mortgage loan applications because investors are not buying its loans.

Fannie Mae, the nation's largest source of home loan funding, increased its holdings of risky subprime loans in 2006 while its profits fell that year, the company said on Thursday in a long-delayed report.

Bear Stearns Cos. Inc. is cutting about 240 jobs at two mortgage lending units, a person familiar with the situation said, as a global credit squeeze and a subprime lending crisis rattles markets.

Prices of metals, energy and grains tumbled on Thursday as commodities were caught up in a global rush out of risky investments for the safety of cash.