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The Dow Jones Industrial Average swept clean Tuesday's historic gains with a 519.83-point nosedive Wednesday, reflecting widespread fears about contagious European debt, the impact of Standard & Poor's downgrades, and an economic slowdown worldwide. Signaling further distress for housing markets, banks with thick mortgage portfolios and homebuilding companies saw their stocks tumble in an investor stampede for the exits. Following the Dow closely, the Nasdaq and S&P 500 plunged 101.47 points and 51.77 points, respectively.

Fidelity Mortgage, Inc. has new ownership. PSM Holdings, Inc., recently announced the completion of its acquisition, which fuses Fidelity with United Community Mortgage Corporation, a wholly owned subsidiary of Prime Source Mortgage, Inc., via its parent company, PSMH.

Nine brokers and five lawyers will face prosecution over their alleged role in a $58 million mortgage fraud scheme that banked on 100 loans across New York City and three state counties. According to a Thursday statement, the U.S. attorney for the Southern District of New York and Federal Bureau of Investigation stepped up with a five-count indictment against the defendants. Starting in 2004, Gerard Canino and co-conspirators allegedly closed deals for distressed properties by going through sham buyers and attorneys.

Coupled with an interest in conforming jumbo loans, a wave of uncertainty over economic news helped throw homeowners into a refinancing frenzy last week, feeding a surge in mortgage applications across the board. Despite upticks, purchase applications continued to flat-line in a market overshadowed by weak consumer confidence, according to the Mortgage Bankers Association. Speaking to MReport, MBA VP Mike Fratatoni added his two cents about S&P's downgrades and the nation's long-term debt crisis.

Citing recent trouble on Wall Street, anemic job growth, and lags in the housing economy, the Federal Reserve made public that it will keep interest rates at historically low levels until 2013. The new language marks a market-rallying policy shift for the central bank, which previously kept mum about when it would hike up interest rates. A 429-point jump by the Dow followed a Federal Open Market Committee meeting in which the Fed's decision-makers reportedly failed to reach a consensus on interest rates.

Following on the heels of debt downgrades and a bipolar Dow Jones Industrial Average, the market for commercial mortgage-backed securities sauntered back a few steps, showing declines in special servicing loans to 12.3 percent over the second quarter this year. Successive reports from analytics company Trepp and the Wall Street Journal spotted troubling trends for CMBS markets, with credit looking to further tighten and borrowers poised to shoulder the consequences. Performing loans also fell to 29.5 percent over June, down from March.

Standard & Poor├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós continued a bold streak it started Saturday by deflating debt credit ratings for mortgage giants Fannie Mae and Freddie Mac Monday, scaring investors and adding velocity to the Dow's 630-point plunge.

In opposition to the recently recorded declines, the Fiserv Case-Shiller Indexes predicts stable numbers around the country by 2012. Notable stats from the 380 markets that the survey examined include a forecasted rise in housing affordability to pre-crisis levels and an increase in home pricing strength near the start of 2012. The Fiserv Case-Shiller Home Price Insights, available now, indicate that housing affordability could rise, since current pricing is about 5 percent above data from 2000.

A rollercoaster Dow Jones Industrial Average, successive downgrades in U.S. Treasury and GSE debt, and renewed worries over euro zone defaults buried news over the weekend that the FDIC circled wagons around two new failed banks. The federal agency covered the $160.4 bill left by two banks in Illinois and Washington that brought the failed financial institutions tally to 63 for the year. Requiring the FDIC to step in as receiver, Illinois-based Bank of Shorewood and Washington-based Bank of Whitman both closed.

Standard & Poor├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós sent markets into a tailspin Monday when it downgraded credit ratings on debt for mortgage giants Fannie Mae and Freddie Mac, citing majority ownership by the federal government, whose own ratings the agency pulled down to AA+. Showing no remorse, the ratings agency also downgraded debt ratings for 10 Federal Home Loan Banks across the country. The dual downgrades represented a vote of no confidence by S&P that helped create selloff frenzy on Wall Street.