Already this year, more than half a million homes have been repossessed even though they are more affordable than ever with mortgage rates. The average rate for a 30-year fixed mortgage is just a little more than 4.5 percent, yet those rates are hard to come by, CBS News Correspondent Anthony Mason reports.
When Cindy and Paul Giachino went to refinance their New Jersey home, they couldn't believe the interest rate they were offered.
"I let out a little scream," Cindy Giachino said.
"I heard it from downstairs," Paul Giachino said.
The Giachinos bought their house nearly two years ago with an interest-only loan at 6 3/8 percent. They recently refinanced to a 30-year fixed mortgage at 4.25 percent.
"That will save us $300 a month," Cindy Giachino said.
"That's a car payment," Paul Giachino said.
With interest rates falling to 50-year lows, the phones are ringing at Crossroads Finance in Pompton Plains, N.J.
But tighter lending standards are making it hard for many to take advantage of the lower rates.
Mortgage broker Wendy Nastasi says banks won't cut any corners anymore:
"We want to see people who have money in the bank for reserves and have decent credit scores," Nastasi said.
But in the wake of the recession, 25.5 percent of all consumers - 43 million people - have credit scores below 600, marking them a bad credit risk, according to FICO. Scott Katzer doesn't have that problem.
"I'm current on my mortgage, current on my bills," Katzer said.
But foreclosures in his Fort Lauderdale, Fla., neighborhood have driven down the value of his home.
"Houses that were in the 400 (hundred thousand) to 500 range are barely above the 200 range," Katzer said.
With his house now worth less than his mortgage, banks won't let him refinance to a lower rate.
"I'm being told the same thing," said Katzer. "I cannot qualify based on the value of the property in its current location."
So many of the people who need the relief the most can't get it, which is one reason why, even with these record low rates, applications for home loans are declining again.