The recent rate drop on 30-year-mortgages following the government bailout of mortgage giants Fannie Mae and Freddie Mac has caused lenders' phone lines to ring in Hawaii.

However, not everyone has been able to take advantage of the opportunity.

For some borrowers, the number that they needed already has come and gone. Others have found that they have been eliminated from the conventional lending market by stricter lending standards that require higher credit scores and better loan-to-value ratios. An unknown percentage of borrowers have elected to sit on the fence. For these reasons, Hawaii's real estate experts are still undecided as to whether the favorable rates will provide much lift for the slumping market. Still, for those whose credit scores and loan-to-value ratios have allowed them to obtain new mortgages or refinance under better terms, the gains have been substantial.

Mililani resident Merle Yusi estimated that she and her husband, Michael, saved about $200 a month on the payment for their new home when the interest rate fell to 5.875 percent from 6.25 percent.

“;We could have purchased the house anyway, but it's really nice to have more money in our pockets,”; said Yusi, who closed on Thursday. “;We were delighted to be able to lock into a lower rate.”;

Not all borrowers have been so lucky. In these trying economic times, rate changes have been as fleeting as the brief glimpse of a rainbow after the storm. While rate decreases have accelerated over the past two weeks, and even hit 5.2 percent for about a half-day, they are still fluctuating wildly. As of yesterday, most Hawaii lenders were offering rates ranging from 5 percent to 6 percent - with points.

“;We had a lot of activity when it was lower than 5.5 percent. However, since then, the rates have been zooming up and down,”; said Rusty Rasmussen, vice president of Castle & Cooke Mortgage.

For many borrowers, especially those who have had their properties for several years, the current drop is not deep enough to result in any urgency, said Iris Toguchi, executive vice president at Pacific Access Mortgage.

“;We haven't seen a flurry of activity,”; Toguchi said. “;I thought that we would have more inquiries, but in all honesty, most of our customers probably refinanced four years ago when the rates were lower.”;

Newton Kanno, president of Mortgage Lenders Inc., said that customers were calling a few weeks ago when the mortgage rates fell to 5.2 percent but that as rates have risen customer volume has come back to normal.

“;We anticipate that rates are going to go down again,”; he said. “;Our customers are not going to do anything until it hits 5.5 percent with zero points. Then, we'll see quite a bit more activity.”;

  It's not a given, though, that everyone who is in the market to refinance will jump. The Fed has hinted that interest rates could move lower if the economy continues to sink, prompting some borrowers to try to time the market. But waiting to lock in a lower interest rate carries risk for borrowers that the loan product they choose still will be available, or that if lending standards tighten they still will qualify, Rasmussen said.

“;The challenge for us is that the rules are changing constantly. Someone that qualified yesterday may not qualify today,”; he said.

Most lenders say the time to lock in loan rates is now; of course, that applies only to borrowers who can qualify under the tighter lending guidelines.

“;We don't encourage our customers to speculate on the future direction of interest rates,”; said Lee Moriwaki, senior executive vice president of the Bank of Hawaii's consumer lending and mortgage division.

It was these factors, along with the fear that waiting could cost them their dream home, that encouraged the Yusis to go ahead and purchase even though they were aware that interest rates could fall further.

“;We were carefully paying attention to the interest rates and were fairly confident that they would go down, but we didn't want to take the chance,”; she said.

In addition, fluctuating home values and credit requirements have eliminated some borrowers. Where there used to be a multitude of loan products for potential buyers or homeowners, many have gone in the wake of the subprime crisis, Rasmussen said.

“;We're not like Baskin-Robbins anymore,”; Rasmussen said. “;Now, we've just got vanilla, chocolate and strawberry.”;

However, in some cases, it's still possible to help people get into homes or refinance even if their credit is damaged or they have inadequate reserves or equity, said Steve Higa, a mortgage broker with Point Financial.

“;The moral of the story is that borrowers should never give up,”; Higa said.

Earlier this week, Higa said he got a customer out of an adjustable-rate mortgage that had gone up to 9.5 percent and into a 5.5 percent fixed 30-year-loan despite the fact that there were prepayment penalties on the loan and the client's credit score had fallen along with his home value.

By using a Federal Housing Administration-insured loan, a borrower can get by with a much lower credit score and fewer reserves, he said. Also, FHA loans only require 3 percent down as compared to 20 percent for most conventional mortgages, Higa said. As a result, the popularity of these government-backed loans in Hawaii and elsewhere is on the rise, he said.

“;I'm doing about 50 percent more of them than I was at the peak of the market,”; Higa said, but he added that in some cases the loan is difficult to obtain for condominium owners.

Thirty-year fixed rate mortgages are the most popular option at Bank of Hawaii, said Moriwaki. Since mortgage rates dropped below 6 percent, there has been about a 20 percent increase in Bank of Hawaii loan applications, he said.

“;When rates go below 6 percent, people notice and respond to it,”; he said. “;Half a point in rate is a really big move.”;

For most consumers, whenever there is at least a half-point drop in interest rates, locking in rates on new loans or refinancing is worth considering, Higa said.

“;When the rate went down to 5.5 and below, we saw about a 50 to 75 percent increase in the call volume for refinancing, and it's been pretty steady,”; he said. “;However, it's harder to get a loan now than it used to be.”;

While Rasmussen also saw a pickup in refinancing applications, especially when the rates were below 5.5 percent, his office was only able to help about one out of five people, he said.

“;Once we analyze their particular situation, it may not be better to refinance,”; he said. “;There are a number of people in the business who are more concerned with providing a new loan than doing what makes the most sense.”;

As a result of prudent lending, Moriwaki said, Bank of Hawaii has had continuously low delinquency and foreclosure rates. Because the bank's stringent standards already had undergone further tightening last year, current bank customers will find the loan application process unchanged, he said.

“;Our philosophy is that we make loans to customers that they can repay,”; Moriwaki said. “;We never want to put a customer under stress because we made them a loan that they should not have made.”;