Mortgage rates fell to the lowest level in decades for the ninth time in 10 weeks with the average rate for a 30-year fixed-rate loan bottoming out at 4.36% for the period ending Aug. 26, according to Freddie Mac.

Mortgage bankers are hoping these rock bottom rates will convince more borrowers to refinance, that is, if other continuing market hurdles like second liens do not stop them.

Amy Crews Cutts, deputy chief economist at Freddie, said in a recent interview with National Mortgage News that one key roadblock for those wanting to refinance is the issue of second liens and subordination, something Freddie is hearing "more and more" about, she said.

"We don't have evidence as to whether this is deliberate on the part of banks," or, alternatively, whether these result in complications that cause a borrower to lose a rate lock, she added.

Despite such concerns, she noted that some rates are becoming more compelling as the long-term indicative 10-year Treasury yield this week dropped to a low not seen since January 2009.

The decline in the 10-year caused the average 30-year FRM rate to fall to 4.36% from 4.42% the previous week. A year ago FRMs were being originated at 5.14%.

But the Freddie economist cautioned that the weak home sales figures of the past week are muddied by the expiration of federal tax credits for home buyers, and a slight rise, 0.9%, in seasonally-adjusted home prices during the second quarter.

In its new survey, Freddie Mac found that 15-year FRMs are now averaging 3.86%, down from 3.90% last week, and 4.58% a year ago.

The average rate for a five-year hybrid adjustable-rate mortgage in the most recent week matched the previous week's 3.56% and down from 4.67% a year ago.

The average rate for a one-year Treasury ARM was 3.52%, down slightly from 3.53% the previous week and 4.69% a year ago.

Average points for 30-year and one-year Treasury ARMs were 0.7. Average points for the other two aforementioned loan types were 0.6.

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