If May of this year was an indicator of the number of mortgage delinquencies to expect for the year, then the housing market would have been in bigger trouble than it is now. But June showed a bright side despite the fact that mortgage delinquencies are still hovering around record highs.

Last month, the number of mortgage payments that were 30 or more days past due was only at 9.39 percent. That might seem like a high number, but that’s down from 9.54 percent in May. In addition to those numbers, about 3.69 percent of the outstanding mortgages were going through various stages of foreclosure proceedings. That’s about a 0.03 percent drop from the previous month and about a 0.12 percent drop from the record highs of March of this year.

The drop in serious delinquencies has fallen for two consecutive months and they are now hovering around the rate that we haven’t seen since September 2009. Currently, there are about twice as many home loans that are delinquent compared to the number of homes in foreclosure. That means these homes are going to be on the banks’ records for quite some time which will only continue to drag the housing market deeper into the slump that it is already in.

Foreclosures on home loans that were guaranteed by Freddie Mac and Fannie Mae have also increased in recent months. The federal government’s attempt to help troubled homeowners with loan modification options has failed in terms of providing permanent modifications for people who have trouble making their mortgage payments. However, Freddie Mac announced that the number of seriously delinquent mortgages on its books has fallen for the fourth consecutive month. That number still stands near 4 percent however.

The largest increases in delinquencies for the year ending in June occurred in Seattle, Phoenix and Charlotte. Sacramento and San Diego also experienced a rising number of delinquencies on home loans. The largest declines were seen in Washington, St. Louis and Denver.

These numbers, however, can be misleading. Is the number of delinquencies falling because those homes are going into foreclosure? And is the number of foreclosures dropping because the foreclosed properties have been discharged so they are off the books and back on the market? Or am I just being cynical? What are your thoughts?

Yesterday we posted a story about how the mortgage rates have fallen to historic lows. Along with these lower rates, however, there are some new guidelines that mortgage lenders are enforcing. But are these low mortgage rates enough to stimulate the economy and help it turn around?

According to an article in the Pittsburgh Post-Gazette, there are fewer people submitting mortgage applications these days despite the low rates. As a result, the Feds and other analysts are concerned that the lowered interest rates aren’t going to be enough to “rev up” the economic recovery for quite some time.

Mortgage lenders have experienced a dramatic drop in mortgage applications since the first-time homebuyer tax credit expired a couple months ago. Some respectable sources say that those applications are down nearly half (42 percent) since the tax credit’s expiration date. Another factor that has led to the drop in mortgage applications is the fact that the mortgage regulations have changed recently, making it more difficult to qualify for a home loan. Many potential homebuyers simply assume they will not qualify for a decent interest rate (if they qualify for a mortgage at all) and they simply don’t even try.

Due to the recent jobs market and so many people losing their jobs, fewer people would qualify anyways for a mortgage because of their damaged credit scores. Many workers are earning less than they were a couple years ago which is keeping them from applying for a mortgage loan as well. Others are simply hesitating to get a mortgage due to the uncertainty of their financial situation and the possibility of losing their job in the near future.

According to Michael Sichenzia, the president of Dynamic Consulting Enterprises, the average person is more concerned about paying down their current debt rather than adding to the amount of debt they have. While that is ideal for their individual situation, this choice isn’t doing much for the overall economy.

There is a light in this mortgage darkness, however. Many current homeowners are refinancing their mortgages. Since April, the number of applications for refinance has increased by 97 percent. With all of the bad news in the industry, at least there is something good to be said. Hopefully, something will turn around soon and this economic recovery that everyone keeps talking about will begin to happen.

If you can qualify for a mortgage, you may not get an opportunity like you have right now for a very, very long time. This may, in fact, be one of the best times in history to get a mortgage because of the low mortgage rates.

Last week, the mortgage rates for a 30-year fixed payment mortgage plummeted to a whopping 4.56 percent. That’s the lowest rates have been since the early 1970s, according to Freddie Mac.

Those tax credits for first-time homebuyers have been expired for a few months now, but if you qualify for the 4.56 percent interest rate, you can still benefit. In fact, the low interest rate may make up for the $8,000 tax credit. Although the tax credit is something you can see and experience in the price right away, the historically low interest rates are long-term benefits which can provide homeowners with a much higher savings after the term of the loan is over and paid off.

However, before rushing into the mortgage market, it is important to compare the type of mortgage that is best for you. The rules of the mortgage industry have changed in recent years so there are some things to consider before getting too excited. Here are a few of the things you should know:

• Unless your credit score is 620 or above, you are going to have a very difficult time finding a mortgage loan, much less finding a rate of 4.56 percent.
• If you are interested in staying where you are at and you have no plans of moving for the next three or four decades, a 30-year fixed rate loan is ideal for you. The rate stays the same for the term of the loan and you won’t find lower rates than you can right now.
• Most mortgage lenders are requiring buyers to put down at least 20 percent on their home purchase.
• If you can pay off your home in five years, consider a five-year fixed rate loan because you may qualify for even lower rates than the 4.56 percent that you’d get with a 30-year fixed loan.
• If you have less than 20 percent to put down on your new house, you may be able to qualify for a mortgage through the Federal Housing Administration. With this type of insured loan, you only need about 3.5 percent of the total purchase price.

These are just a few of the new regulations you may run into when getting a mortgage these days. These new guidelines are designed to help prevent the crash that happened a couple years ago which led to the economic downturn we are now experiencing. Check with a local mortgage broker to find out which rules apply to you and how you can get the best deal on your new home loan.

Earlier this week, Congress passed some new financial reform legislation that is going to protect mortgage borrowers from predatory lenders and other abuse that has led to the economic downturn in the housing market. Unfortunately, some analysts in the mortgage industry are afraid that the new reforms may cause the home prices to increase.

One of the new mandates of the bill requires mortgage lenders to make sure that borrowers have the financial capabilities to make their mortgage payments. This means that they will have to verify their job and other income before approving the loan. Other stipulations in the bill will also restrict lenders from adding costly features to their mortgage agreements, including penalties for prepaying the loan and paying money to brokers who encourage borrowers to take loans which cost more.

In addition to those regulations, the bill passed by Congress also sets up a consumer protection agency which will be designed specifically to monitor the housing market and lender practices. The agency will help ensure that loan contracts for homes are easier for the everyday person to understand so they know what they are signing when they get the loan. Borrowers will also be able to shop around for the best mortgage loan. According to Ken Rosen at UC Berkeley, the consumer protection aspect of the bill is designed to control some of the practices that got out of control in recent years and got us into the mess that we are in today.

Some analysts are skeptical of how effective the new reforms are going to be, though. Kimberly S. Jones, a policy advocate for the Center for Responsible Lending in San Francisco, said that predatory lenders always find a way to get around the regulations. As a result, consumers will need to be more careful when signing up for mortgages. In essence, it is the borrower’s responsibility to know what they are getting into when they sign up for something as important as a mortgage loan. The bill, however, makes it easier for consumers who are not experienced in the mortgage industry to have a better understanding of what is involved. And with mortgage rates at historic lows right now, there are more first-time homebuyers in the industry applying for mortgages so the reform is coming at a great time.

Average 30-year mortgage rates ticked up slighltly from 4.66 to 4.68% according to BestCashCow/Informa data. That's down from a 2010 high of 5.20% in early April. Fifteen year mortgages rates are even lower at 4.13%. This is a boon to homebuyers as well as those looking to refinance their homes. While the WSJ is suggesting that rates may go higher shortly, I don't think that is necessarily the case. Rates may be held down by a slowing economy and a lack of mortgage demand. Some economists fear a double dip recession. In addition, Eureopean markets are still unsettled due to sovereign debt issues. There is also mounting concern about a China bubble. Should the Chinese market pop, a flood of money will pour into the US Treasuries seeking safety and stability and driving yields down further.

The 10 year Treasury is now at 2.94%, a full percentage point lower than two months ago, when it briefly went over 4%. The 10-year is the benchmark rate for 30-year mortgages so if the yield continues to fall, mortgage rates will fall with it.

Does that mean you shouldn't buy or refinance now? No. Rates are at record lows and if you have the opportunity to take advantage of them, do it.

What Does This Mean for Homebuyers?

I've been following actual rates, not just averages for a 30-year fixed rate loan in Massachusetts with 0 points ($200,000 loan) for the past four months. Two months ago the rate shot up to 5.125%. The best rate is now 4.50% with 0 points and $1,995 in fees.

View mortgage rates by state and zip code.