BUSINESS BRIEFS
Foreclosures on homes surged to new record
Advertiser News Services
WASHINGTON — Home foreclosures shot up to an all-time high in the third quarter, fresh evidence of the housing meltdown.
The Mortgage Bankers Association in its quarterly snapshot of the mortgage market released yesterday said that the percentage of all mortgages nationwide that started the foreclosure process jumped to a record 0.78 percent during the July-to-September period. That surpassed the previous high of 0.65 percent set in the prior quarter.
More homeowners also fell behind on their monthly payments.
The delinquency rate for all mortgages climbed to 5.59 percent in the third quarter. That was up from 5.12 percent in the second quarter and was the highest since 1986, the association said.
Payments are considered delinquent if they are 30 or more days past due.
Homeowners with spotty credit who have subprime adjustable-rate loans were especially hard-hit. Foreclosures and late payments for these borrowers also reached all-time highs in the third quarter.
LUXURY-HOME BUILDER SEES LOSS
NEW YORK — Toll Brothers Inc., the nation's largest builder of luxury homes, reported its first quarterly loss in 21 years yesterday as the housing downturn that the company called the worst in four decades deepened.
Toll, based in Horsham, Pa., reported a loss of $81.8 million, or 52 cents per share, in its fiscal fourth quarter, compared with a gain of $173.8 million, or $1.07 per share, a year ago.
The company booked a charge of $314.9 million in write-downs, mainly for homes it could no longer sell at a profit. Without the write-downs, the company would have posted profit of 72 cents per share, less than half the $1.49 posted during the same quarter a year earlier.
The loss was narrower than expected on Wall Street, where analysts polled by Thomson Financial had estimated a loss of 77 cents per share.
CHRISTMAS BEING STINGY TO CANADA
PORTLAND, Maine — The drooping value of the U.S. dollar means Canadian Christmas tree growers are seeing less green this season.
The Canadian growers have seen their U.S. sales decline in recent years because of increasing costs and competition from U.S. growers. But it's their own currency that's causing them the most grief these days.
Compared to the U.S. greenback, the Canadian dollar is 15 percent higher in value than at the beginning of the year. Because growers are paid in U.S. dollars, their revenues are dropping by the same amount.
Canadian exporters of products ranging from seafood, lumber and auto parts to Canadian Club whiskey are all in the same boat. But Christmas trees are an especially visible example at this time of year.
UNITEDHEALTH CHAIRMAN SETTLES
LOS ANGELES — Former UnitedHealth Group chairman and chief executive William McGuire, a key figure in recent controversies over backdated stock options, will surrender $600 million in benefits as part of a settlement in the case against the health-insurance giant, the company said.
As part of the deal, McGuire will surrender more than 9.2 million shares of options.
Former general counsel David Lubben will give up roughly $30 million in stock-option compensation as well, according to terms reached with a Minnesota special-litigation committee.
In a statement, UnitedHealth said the special committee, made up of two former state Supreme Court justices, determined that all claims against the defendants in derivative suits should be dismissed.
The company said that McGuire's surrender of stock options is valued at $320 million. He also gives up his interest in the company's supplemental executive-retirement plan, worth $91 million, and the $8 million in his executive-savings plan.
