Business news in brief

— QUOTE OF THE DAY "We can get billions out.We can buy General Motors overnight, but we can't help a homeowner."

Sen. Mike Johanns, R-Neb.,

on the Troubled Asset Relief Program Article, 1D Mortgage rates steady, lending brisk

WASHINGTON - Rates for 30-year home loans were unchanged this week and remain close to record-low levels.

The average rate for a 30-year fixed mortgage was 5.04 percent, the same as a week earlier, mortgage company Freddie Mac said Thursday.

Rates, while above the record low of 4.78 percent hit in the spring, are still attractive for people looking to buy a home or refinance. Applications for home loans rose nearly 13 percent last week from a week earlier as refinancing applications surged, the Mortgage Bankers Association said Wednesday.

Freddie Mac, the Federal Home Loan Mortgage Corporation, collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.

The average rate on a 15-year fixed-rate mortgage fell to 4.46 percent, from 4.47 percent last week, according to Freddie Mac. That was the lowest level on records dating to 1991.

Rates on five-year, adjustable-rate mortgages averaged 4.51 percent, unchanged from a week earlier. Rates on one year, adjustable-rate mortgages fell to 4.52 percent from 4.58 percent.

The rates do not include add-on fees known as points.

The nationwide fee for loans in Freddie Mac's survey averaged 0.6 point for 30-year, 15-year and one-year loans. The fee averaged 0.5 point for five-year mortgages.

Cypress Gardens closed, up for sale

WINTER HAVEN, Fla. - Cypress Gardens, which reigned as Florida's grandest amusement park in the days before Disney, has shut down while its owners try to sell it.

The 73-year-old park, known for water-skiing shows, lush flower gardens and Southern belles in hoop dresses, was shuttered Wednesday after years of sagging attendance and ownership changes.

The owner, Land South Adventures, said the park was no longer financially viable. The company said in a statement that it "has explored numerous management frameworks and exhausted every possible approach to keep the park running in its traditional form."

The company said it was negotiating with several potential buyers.

Cypress Gardens, once a must-see for Florida visitors, was opened in 1936 by Dick and Julie Pope, and the family sold it in 1985. The property has been bought and sold several times since.

It was closed in 2003, then changed hands under a complicated deal that involved help from state and local governments and a nonprofit conservation group. In 2004 it was hit by three hurricanes, and the owners were unable to reach a settlement with an insurance company to cover damages. The current owners bought it in October 2007 for $16.8 million.

GM to pay suppliers more frequently

DETROIT - General Motors Co. has decided to speed up payments to its parts suppliers to help ease their cashflow problems and ultimately improve relations with the companies, a spokesman said Thursday.

The move is important, industry analysts say, because GM has had strained relations with its suppliers since the 1990s when it continually demanded cost cuts. As a result, suppliers offered new technology first to other automakers that paid better and more frequently, putting GM behind.

"The decision supports our commitment to improve our relationships with our suppliers," spokesman Dan Floors said. "We're going to continue to look for ways to improve the ways we do business with them."

GM pays suppliers once per month and an average of 47 days after goods are delivered, Floors said. Under the new plan, GM will keep the 47-day average, but starting with Nov. 1 deliveries, payments will be made every Tuesday.

Many auto-parts supply companies that make products ranging from transmissions to hoses and springs ran into serious financial problems earlier this year when GM and Chrysler shut down many of their factories for extended periods to control inventory while they were in bankruptcy protection. The shutdowns left the companies without cash payments from the automakers, and many were unable to borrow to cover expenses because of the credit crunch.

Power firms commit to plug-in fleets

COLUMBUS, Ohio - Two of the nation's largest power generators said Thursday that they plan to begin switching their company cars and trucks to plug-in hybrid vehicles or all-electric vehicles starting Jan. 1 to help cut greenhouse gas emissions.

The commitment by Charlotte, N.C.-based Duke Energy and Juno Beach, Fla.-based FPL Group Inc. represents more than 10,000 vehicles and potential revenue of $600 million or more for auto manufacturers.

The goal is that by 2020, 100 percent of all new fleet vehicles will be plug-in electric vehicles or plug-in hybrid vehicles.

The companies say plug-in cars will reduce carbon emissions by up to 70 percent - 100 percent if a vehicle is charged by zero-carbon renewable energy sources - and lower fuel costs by 80 percent.

They say it also will help jump-start the market for these vehicles.

"We should work together. We benefit the same way," FPL Vice President Chris Bennett said.

Duke has 4 million electric customers in five states and FPL is the parent of Florida Power & Light, which has 4.5 million customers in Florida.

IRS focuses on offshore funds' loans

The Internal Revenue Service told its auditors in Manhattan to develop cases against offshore hedge funds and foreign companies that it said are trying to avoid taxes on income from loans they make in the U.S.

The agency, in a Sept. 22 directive, urged the Manhattan field director of the IRS financial services section to pursue a type of transaction the agency says seeks to improperly take advantage of an otherwise legal tax break. The agency also urged the official to be watchful for similar techniques.

"We understand that foreign corporations and nonresident aliens may have used other strategies to originate loans in the United States, giving rise" to tax obligations, Steven Musher, the top lawyer in the IRS's international department, wrote in a memo to Kathy Robbins, the Manhattan field director.

"We encourage you to develop these cases and we stand ready to assist you in the legal analysis," Musher wrote.

It is unusual for IRS lawyers to recommend audit targets to field investigators, said Robert Willens, founder of Robert Willens LLC, which advises investors on accounting and tax rules.

The IRS is "obviously incensed about this and intends to pursue the strategy quite vigorously," Willens said.

Business, Pages 32 on 09/25/2009

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