Mortgage rates head deeper into record territory

Thirst for bonds shows growing fear that recovery is in jeopardy

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Mortgage rates headed deeper into record territory this week as rumblings from Europe continue to make the guaranteed bonds that fund most mortgage loans look like a safe bet to investors.

Fears that the European debt crisis will derail the global economic recovery may also be weighing on would-be homebuyers, as demand for purchase loans slipped last week, with applications back down to levels seen a year ago.