Mortgage rate drops a skosh

If you didn't lock in your mortgage refi rate earlier this month, you might want to kick yourself. Still, mortgage rates remain near record lows. 

The new Freddie Mac mortgage survey says the average rate for 30-year, fixed-rate mortgages fell a tiny bit this week to 4.11% (with an average point of 0.8) from last week's 4.12%. It broke all records the week before that with an average of 3.94%.

For a 15-year fixed, the new average rate is 3.38%, up from 3.37% last week and 3.26% the week before.  (Should you refinance? Try MSN Money's calculator.)

The news from other sources wasn't as bright. The Mortgage Bankers Association, which does its own tracking of mortgage rates, reported an increase "of 7 basis points to 4.26% since last week while the purchase application volume declined a notable 8.8% and the refinance application volume plunged 16.6% over the same period," The Christian Science Monitor says.

If that's the case, what's caused rates to rise? For that, we turned to Diana Olick, CNBC's crack real-estate reporter, who quoted Anthony Sanders, a finance professor at George Mason University:

First, Europe's alleged debt bomb solution is pulling dollars out of Treasuries resulting in rising Treasury rates … and mortgage rates. Second, FHFA is increasing Guarantee Fees for Fannie and Freddie loan purchases/insurance which adds to the mortgage rate. Third, mortgage rates have a risk premium component that follows the VIX. 

Mortgage rates may be of particular interest to you if you're watching for developments in  an Obama administration idea to make refinancing available to those whose mortgages are too far underwater to qualify now. The other day, members of Congress from California asked that the Federal Housing Finance Authority refinance all mortgages owned by Freddie Mac and Fannie Mae.

Meanwhile, refinancing for those who meet three conditions -- those who are underwater, are timely with their payments, and also have mortgages that haven't been securitized and are still held by banks -- has surfaced in the discussion between big banks and the state attorneys general who allegedly want to hold banks accountable for the robo-signing scandal and other mistreatment of homeowners.

Reuters blogger Felix Salmon, for one, thinks including that in the AG talks is a very bad idea because so few underwater homeowners would be helped. He wrote:

For one thing, it's downright unfair and invidious to allow 20% of underwater homeowners to refinance while ignoring the other 80%. More to the point, giving homeowners the ability to refinance their mortgages is what you do, if you’re a bank. It's not some kind of gruesome punishment.

Olick also doesn't see a great outcome for underwater homeowners from either effort. Post continues after video.

She wrote on her blog:

One weekly report does not a trend make, but today's mortgage application survey should serve up a good dose of reality to all of those state attorneys general and Obama administration officials touting a grand new refinance program for underwater borrowers. …

The administration's refi proposal is more politics than substance, and this latest AG/bank settlement proposal is just plain baffling, because what does refinancing current borrowers have to do with justice and restitution for borrowers whose foreclosure paperwork was mishandled?

Where can we expect rates to go from here? A lot depends on related factors. Says The HSH Blog, in response to the Mortgage Bankers Association report:

"Economic news continues to brighten, pushing mortgage rates upward somewhat," said Keith Gumbinger, vice president of HSH.com. "But despite the increase this week, there are few reasons for rates to continue to climb."

… With plenty of challenges still facing the economy, Gumbinger notes, "There should be ample opportunity for mortgage rates to ease again. The cumulative rate increase in recent weeks has been barely an eighth of a percentage point, so it's not enough to warrant much concern."

More on MSN Money:

• Finally time to buy a house
• 5 big refinancing blunders
• Calculator:Should you rent or buy?
• 5 dumb refinancing mistakes
• Could Grandma lose her house?
• How much house can you afford?