Rate on 30-year fixed mortgage falls to 3.98 pct.

WASHINGTON (AP) — The average rate on the 30-year fixed mortgage hovered above its record low for a fourth straight week. But cheap mortgage rates have done little to boost home sales or refinancing.
Freddie Mac says the rate on the 30-year fixed loan fell to 3.98 percent from 4 percent the previous week. Seven weeks ago, it dropped to a record low of 3.94 percent, according to the National Bureau of Economic Research.
The average rate on the 15-year fixed mortgage edged down to 3.3 percent from 3.31 percent. Seven weeks ago, it too hit a record low of 3.26 percent.
Rates have been below 5 percent for all but two weeks this year. Yet this year could be the worst for home sales in 14 years.

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U.S. Housing Market Still On Life Support; Prices At 2003 Levels

With each passing year, the former Oracle of the Fed, Alan Greenspan, is reminded that there really was a housing bubble and lowering interest rates to record lows just made matters worse.  Nearly four years after the housing market peak in 2007, record low mortgage rates are no match for falling incomes and 9% unemployment.
The Case-Shiller Home Price Index, released on Tuesday, showed that nation wide home prices did not register a significant change in the third quarter of 2011, with the U.S. National Home Price Index up by only 0.1% from its second quarter level. Home prices are down 3.9% across the board and are now back to their first quarter of 2003 levels. The market consensus was for a 3% decline year over year.
From August to September, housing prices have fallen the most in Atlanta, with a 5.9% decline, followed by Tampa Bay and San Francisco, both with a 1.5% drop in housing prices.
Boston, New York, Washington and Los Angeles remain the most expensive cities in the lower 48 states.
"The plunging collapse of prices seen in 2007-2009 seems to be behind us," says David M. Blitzer, Chairman of the Index Committee at S&P Indices. "Any chance for a sustained recovery will probably need a stronger economy."

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Angels land slugger Hamilton in $125 million deal: report

(Reuters) - Free agent slugger Josh Hamilton has agreed to a five-year, $125 million deal to join the Los Angeles Angels, Major League Baseball's (MLB) website reported on Thursday.
The five-time All-Star, who overcame drug and alcohol addictions to become one of MLB's most feared hitters, helped power the Texas Rangers to consecutive World Series appearances in 2010 and 2011.
The 31-year-old hard-hitting outfielder broke into the major leagues in 2007 with the Cincinnati Reds but spent the next five years with the Rangers and took home American League Most Valuable Player (MVP) honors in 2010.
Hamilton has a career .304 batting average, 553 runs batted in and 161 home runs, including a career-high 43 last season.
He joins an Angels team that already boasts three-time National League MVP Albert Pujols, a 32-year-old slugger who signed with the team last offseason.

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Angels land slugger Hamilton in $125 million deal

(Reuters) - The Los Angeles Angels grabbed Major League Baseball's prized free agent for a second consecutive year on Thursday by signing slugger Josh Hamilton to a five-year, $125 million contract.
Hamilton, a five-time All-Star who overcame drug and alcohol addictions to become one of Major League Baseball's most feared hitters, powered the Texas Rangers to consecutive World Series appearances in 2010 and 2011.
He joins a high-powered Angels lineup that includes three-time National League Most Valuable Player (MVP) Albert Pujols, a 32-year-old slugger who signed a 10-year $240 million deal with the team last year.
The Rangers had been hopeful of resigning the 2010 American League MVP and admitted they were caught off guard by Hamilton's jump to their American League West division rivals.
"Our full expectation was that the phone call was going to be before he signed, certainly not after," Texas General Manager Jon Daniels said on the team's website.
"Josh had indicated recently, last week, he told us he felt it might be time to move on but that we were still talking ... I'm a little disappointed in how it was handled, but he had a decision to make and he made it."
The 31-year-old hard-hitting outfielder broke into the major leagues in 2007 with the Cincinnati Reds but was traded to the Rangers the following year.
Hamilton has a career .304 batting average, 553 runs batted in and 161 home runs, including a career-high 43 last season.
The Rangers stood by Hamilton as he battled to control is addictions, including a relapse before the start of last season.
But the slugger got the campaign off to a sizzling start and looked to be a Triple Crown threat after slamming 18 homers in the Rangers' opening 34 games.
Hamilton, however, saw his production fall off in the second half of the season finishing with a .285 batting average and 128 runs batted in.
"Josh has done a lot for the organization, the organization has done a lot for Josh -- a lot of things that aren't public and things of that nature," said Daniels.

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Yankees sign former rival Youkilis to one-year deal

NEW YORK (Reuters) - Former Red Sox rival Kevin Youkilis officially joined the New York Yankees on Friday when he signed a one-year contract to fill a void left by the absence of Alex Rodriguez, the American League team said.
The three-time All-Star, 33, will serve as the starting third baseman with slugger Rodriguez expected to be sidelined until midseason after having surgery on his left hip.
The deal for Youkilis, a career .283 hitter, will pay the infielder $12 million, according to media reports.
Youkilis, who has played all but 80 games of his nine-year major league career for Boston, batted a combined .235 last season with 19 home runs and 60 runs batted in 122 games for Boston and the Chicago White Sox, to whom he was traded in late June.
Rodriguez told reporters at a recent charity event in Miami that Youkilis would be a good addition to the Yankees' lineup.
"Youk has always been a tough out," he said. "He's a tough player, a guy that's a winning player."
With Youkilis's deal finalized, the Yankees were working to finalize a two-year contract with Japanese outfielder Ichiro Suzuki.
Acquired by the Yankees in July from the Mariners, Ichiro thrived in New York, batting .322 with five homers, 27 RBIs and 14 stolen bases in 67 games and provided a late-season spark that helped the club win the American League East title.
Overall last season, Ichiro batted .283 with nine homers, 55 RBIs and 29 stolen bases.
It was believed New York was nearing agreement on a two-year deal that would present Ichiro a chance to reach the 3,000-hit mark with the Yankees.
Ichiro, a career .322 hitter, has amassed 2,606 hits in the major leagues since coming to the Mariners from Japan in 2001.

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Fixed mortgage rates rise above record lows

WASHINGTON (AP) — Fixed mortgage rates rose slightly this week off their record lows. The year ends much like it began, with few people able to take advantage of the best rates in history.
Freddie Mac says the average on the 30-year home loan increased to 3.95 percent from 3.91 percent. Last week's rate was the lowest average on records dating to the 1950s.
The average on the 15-year fixed mortgage rose to 3.24 percent. That's up from 3.21 percent, also a record low.
Rates have been below 5 percent for all but two weeks in 2011. Even so, this year is shaping up to be one of the worst ever for home sales.

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Fixed mortgage rates end year above record lows

WASHINGTON (AP) — Fixed mortgage rates rose slightly this week off their record lows. The year ends much like it began, with few people able to take advantage of the best rates in history.
Freddie Mac said Thursday that the average on the 30-year home loan increased to 3.95 percent from 3.91 percent. Last week's rate was the lowest average on records dating to the 1950s.
The average on the 15-year fixed mortgage rose to 3.24 percent. That's up from 3.21 percent, also a record low.
Rates have been below 5 percent for all but two weeks in 2011. Even so, this year is shaping up to be one of the worst ever for home sales.
Previously occupied homes are selling just slightly ahead of last year's dismal pace. And new-home sales appear headed for their worst year on records going back half a century.
Next year could be better. More than 5 percent of households said this month they plan to purchase a home within the next six months, according to the Conference Board.
Builders are also hopeful that the low rates could boost sales next year. Low mortgage rates were cited as a key reason the National Association of Home Builders survey of builder sentiment rose in December to its highest level in more than a year.
But so far, rates are having no major impact. Mortgage applications have fallen slightly in recent weeks, according to the Mortgage Bankers Association.
High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many Americans don't want to sink money into a home that they fear could lose value over the next few years.
To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week. The average rates don't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for the 30-year loan was unchanged at 0.7; the average on the 15-year fixed mortgage was unchanged at 0.8.
For the five-year adjustable loan, the average rate rose to 2.88 percent from 2.85 percent. The average on the one-year adjustable loan ticked up to 2.78 percent from 2.77 percent.
The average fees on the five- and one-year adjustable-rate loans were unchanged at 0.6.

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Credit score focus of new celeb-backed debit card

NEW YORK (AP) — Personal finance media personality Suze Orman is thinking big. She's the   first out of the gate in the fast-growing prepaid debit card market with a card that aims to help its users build a credit score. It's a gamble that could pay off, if it can help create a way measure the creditworthiness of millions who function outside the traditional financial system.
The latest in a string of celebrities to put their stamp on a prepaid card, Orman will likely avoid the criticism about high fees lobbed at earlier offerings, such as those of hip-hop mogul Russell Simmons and reality show stars the Kardashians. Orman's card costs $3 to obtain, and then just $3 a month, rivaling the hugely popular Walmart MoneyCard.
Although some will question how Orman will recoup the more than $1 million she has invested in the card when charging that little, the real twist isn't the low fee structure. Orman is working with credit reporting agency TransUnion to create a new kind of credit score for users of "The Approved" prepaid MasterCard, one that's based on their spending habits.
Right now, using debit cards — both the prepaid kind and those tied to bank accounts — does not influence an individual's credit score, which is calculated with data related to borrowing. If Orman's experiment is successful, this new type of score could be a game-changer for the estimated 60 million Americans who do most or all of their personal business in cash or with cash alternatives like prepaid cards.
The TV adviser said she approached several companies, urging them to agree to develop such a score, and TransUnion ultimately agreed to gather spending data for 18 to 24 months. It will use that data to try to come up with a formula that works as a way to predict whether the user is a good risk for lenders.
"This is truthfully a work in progress," said Orman.
Banks and other lenders are interested in creating ways to measure how prepaid cards are used, because of the huge market they represent. Consumers loaded an estimated $70.7 billion onto prepaid cards in 2011, up from $2.7 billion in 2005, according to consultancy Mercator Advisory Group.
Mercator projects the market will top $120 billion this year if adoption continues at the same pace.
In general, users can be divided into three groups. The first subset is those caught up in the economy — people who had good credit until it was damaged by events like unemployment or foreclosure. Second are those who have not yet built credit histories, mainly the young and recent immigrants. The third group avoids banks, often because of negative experiences, such as racking up high overdraft fees.
"Wouldn't it be fabulous if, for the first time in history, people are literally rewarded for spending cash, versus penalized, in my opinion, for doing so?" Orman said.
The problem with traditional credit scores from FICO Inc. and its competitors is that they measure how well individuals keep up with their payments, but don't pay any attention to their overall financial health, she said. "Scoring doesn't question where the money is coming from to make payments."
Prepaid cards have already filled some of the void for those who don't use banks, especially because they can be used to receive paychecks via direct deposit. But because they don't contribute to credit scores, the cards can't help users get a mortgage, a car loan or a credit card.
Not having a credit score, or having a low one, also drives up the cost of living in other ways. Lower scores can mean higher car insurance rates, higher rent, difficulty getting a job and paying higher interest rates for any credit available. People with little credit history — known as a "thin file" in the industry — are also the most likely to use alternative services like payday lenders, check cashing stores and bill pay services. These are expensive options when compared with credit cards and banks.
FICO Inc. and other companies use data tied to borrowing to determine a score meant to measure the likelihood an individual will pay back future loans. FICO's 300-to-850 scale is based on an individual's history making payments on loans, the percentage of available credit that is being used and how long the individual has used credit, among other data.
Those with thin credit files have a better chance of having their creditworthiness reflected by FICO's "expansion score," which factors in data like utility bill payments and rent payments. FICO CEO Mark Greene said the expansion scores have shown that the population without traditional scores mirrors to the larger population in terms of credit risk. Other credit score providers are beginning to provide measures based on utility payments and other nontraditional data.
One big difference for developing a prepaid score, however, is that these alternatives still measure how well individuals meet obligations, not how they spend the rest of their income.
"Spending is not actually a great indicator of the thing that we're trying to measure, which is the likelihood you're going to pay your bill," Greene said. "We need to be careful about how we approach that issue."
Another issue a prepaid-linked score must address is the fact that the typical reloadable card is used for just three to four months, said Brian Riley, who analyzes the card market for the consultant The Tower Group.
That timeframe is likely to expand, however, because more users are beginning to have their paychecks deposited to reload prepaid cards. Adding rewards and services, and cutting fees, may also increase customer loyalty.
Orman is adamant that her card will carry only a $3-per-month fee for users who load at least $20 per month onto it. Fees will rise only if the user uses ATMs outside the network it is linked to when withdrawing cash. Consumers who use The Approved Card will also get daily text messages updating their balance, along with one after each purchase, and other free services like ID theft monitoring, credit monitoring and free credit reports from TransUnion.
The media star, whose new show on the Oprah Winfrey Network premieres Monday, said she knows creating the score will be an uphill battle, but believes that if successful, it will help both lenders and borrowers. "You've got to start it somewhere, and this is the beginning of that process."

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Venezuelans take in shifting news on Chavez health

CARACAS, Venezuela (AP) — Venezuelans began 2013 with a respite from shifting news about the health of President Hugo Chavez, who hasn't been seen in public since his fourth cancer-related surgery three weeks ago.
The country was largely peaceful Tuesday after a New Year's Eve that saw a main government-organized celebration canceled due to Chavez's illness.
Jorge Rodriguez, a Chavez ally and mayor of a Caracas district, reiterated that the president is going through a "complex post-operative process."
He told reporters Tuesday that Venezuelans have shown an outpouring of compassion and support for a leader who has "been planted in the hearts of millions." Rodriguez urged Venezuelans to keep Chavez in their prayers and expressed hope the president would recover.
Chavez's son-in-law Jorge Arreaza, who is the government's science minister and has been with the president in Cuba, urged Venezuelans in a Twitter message Monday night not to believe "bad-intentioned rumors" circulating online. "President Chavez has spent the day calm and stable, accompanied by his children," Arreaza said in the message.
That followed a grim announcement from Vice President Nicolas Maduro on Sunday that the president had suffered new complications due to a respiratory infection that appeared after the surgery.
Bolivian President Evo Morales issued a New Year Eve greeting to Chavez lamenting the health problems plaguing his "anti-imperialist comrade."
Morales said he was sending wishes for "strength, energy, and for him to be able to recover soon." Morales made a visit to Havana last week to visit Chavez, but didn't refer to that trip.
In Bolivar Plaza in downtown Caracas, Chavez's supporters strummed guitars and read poetry in his honor on Monday night, singing along with a recording of the president belting out the national anthem.
About 300 people also filled a Caracas church for a Mass to pray for Chavez.
"This country would be terrible without Chavez. He's the president of the poor," said Josefa Carvajal, a 75-year-old former maid who sat in the pews. "They say the president is very sick. I believe he's going to get better."
Chavez's aides held a Mass as well, at the presidential palace, while government officials urged Venezuelans to keep their leader in their prayers.
Venezuelans rang in the New Year as usual with fireworks raining down all over the capital of Caracas. But some of Chavez's supporters had long faces as they gathered in Bolivar Plaza on Monday night holding pictures of the president. A government-sponsored celebration there had been called off.
Speaking to the crowd, lawmaker Earle Herrera said Chavez "is continuing to fight the battle he has to fight."
"He's an undefeated president, and he'll continue to be undefeated," Herrera said.
Political analyst Ricardo Sucre said the outlook for Chavez appeared dark. Sucre noted that Maduro appeared weary during a solemn televised appearance Sunday to announce the latest setback for Chavez.
"Everything suggests Chavez's health situation hasn't evolved as hoped," Sucre said. He said Maduro likely remained in Havana to keep close watch on how Chavez's condition develops.
"These hours should be key to having a more definitive prognosis of Chavez's health, and as a consequence to making the corresponding political decisions according to the constitution," Sucre said.
Sucre and other Venezuelans said it seems increasingly unlikely that Chavez would be able to be sworn in as scheduled Jan. 10 for his new term. The Venezuelan leader has not been seen or heard from since undergoing the Dec. 11 operation.
If Chavez dies or is unable to continue in office, the Venezuelan Constitution says a new election should be held within 30 days.
Before his operation, Chavez acknowledged he faced risks and designated Maduro as his successor, telling supporters they should vote for the vice president if a new presidential election was necessary.
Chavez said at the time that his cancer had come back despite previous surgeries, chemotherapy and radiation treatment. He has been fighting an undisclosed type of pelvic cancer since June 2011.
Medical experts say it's common for patients who have undergone major surgeries to suffer respiratory infections and that how a patient fares can vary widely from a quick recovery in a couple of days to a fight for life on a respirator.
On the streets of Caracas, images of Chavez smiling and saluting were emblazoned on campaign signs and murals. One newly painted mural read: "Be strong, Chavez."
State television played video of Chavez campaigning for re-election, including one of the president shouting: "I am a nation!"
A new government sign atop a high-rise apartment complex reads: "YOU ALSO ARE CHAVEZ."
Norelys Araque, who was selling holiday cakes on a sidewalk Monday, said she has been praying for Chavez. But, she added, "I don't think he will last long."
Araque said her family has benefited from state-run subsidized food markets and education programs started by Chavez, and that she hopes the government carries on with the president's programs if he doesn't survive.
Chavez has been in office since 1999 and was re-elected in October, three months after he had announced that his latest tests showed he was cancer-free.

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Venezuelan VP says he has visited Chavez twice

CARACAS, Venezuela (AP) — Venezuela's vice president says he has visited ailing President Hugo Chavez twice in Cuba and plans to return home to Caracas.
Vice President Nicolas Maduro says he spoke with Chavez during their visits. Maduro says the president has "the same strength as always," despite a health situation that he described as complex three weeks after his cancer surgery.
Maduro says he will return to Venezuela on Wednesday.
He made the comments in an interview broadcast Tuesday night by the Caracas-based television network Telesur.

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