MBS yields have dropped below 4.0%, and mortgage rates are likely to follow them down (tho not that far).

Despite increased efforts to prevent foreclosures, only 35 percent of voluntary mortgage modifications reduced monthly payments; 20 percent of modifications had no effect either way on the payment amount and nearly half of all modifications — 45 percent — resulted in an increased monthly payment, according to research reported Thursday by Valparaiso law professor Alan White. Not even 50 percent of loans modified in January were current in payments on Nov. 25, according to his data."