U.S. mortgage rates fell in the latest week to the lowest on record and posted their ninth drop in the last 10 weeks, Freddie Mac (FMCC) said Thursday.

The rate on a 30-year fixed-rate mortgage, the most widely used home loan, averaged 4.36% in the week ended Aug. 26, down from 4.42% in the prior week and 5.14% from a year earlier, says the survey by Freddie Mac, the second-largest provider of funding for residential loans. It began the survey in 1971.

The rate followed recent declines in Treasury yields after a wave of reports suggested a faltering economic recovery. [Read the full article]

Loss-making U.S. mortgage insurers such as John Paulson-invested PMI Group (PMI) stand to gain as their bigger rival, the Federal Housing Administration, raises its premium rates to boost its cash cushion.

Private players such as PMI, in which billionaire Paulson has a 3% stake, MGIC Investment (MTG) and Radian Group (RDN) were crowded out of the market by FHA-backed loans, which offered lower rates and affordable down payments to new homebuyers.

The FHA, tied to a third of primary insurance written, had a 20% market share of loan originations in April-June, more than 10 times its 2006 share. [Read the full article]

The number of U.S. homes headed for foreclosure fell in the second quarter for the first time since the housing slump began in 2006, but improvements may be fleeting as the number of newly delinquent homeowners rose, a banking group says.

The percentage of loans in the foreclosure process declined last quarter to 4.57% from 4.63% in the first quarter, partially due to lender efforts to ease payments for homeowners and the impact of temporary home purchase tax credits, the Mortgage Bankers Association said in its quarterly delinquency report Wednesday.

Foreclosures could head higher in coming months, however, as the percentage of borrowers at least one payment behind resumed its rise after easing late last year, the MBA said. [Read the full article]

Two compact Kindle e-readers started shipping on Wednesday, but Amazon.com (AMZN) says they're already the fastest-selling Kindle models ever, based on the first four weeks of preorders.

The lowest-priced Wi-Fi-only version is just $139, while the Wi-Fi and free 3G wireless is $189.

The new Kindles will help Amazon compete with Apple's (AAPL) fast-growing iPad tablet, which starts at $499 and features an e-reader among other functions, plus pure e-readers such as the Nook from Barnes & Noble (BKS).

Amazon began shipping its new line of cheaper, faster, lighter and thinner Kindle e-readers on Wednesday. [Read the full article]