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Want to hear a frightening number?

According to the U.S. Office of the Comptroller of Currency (OCC), U.S. home foreclosure rates rose 20% in the first quarter of 2009.

The OCC says that represents one-in-forty U.S. homes in foreclosure right now. Imagine that the next time you get on the train to work, one person in that train car could be in the midst of losing their home.

The jump in foreclosure rates – up 73% since Q1 of 2008, is perhaps the most alarming piece of news hitting the mortgage market on the first day back from the July 4th holiday.

But the foreclosure number has some company. The OCC also reports that mortgages in “serious delinquency” - in other words, over 60 days late – represent 5% of all mortgages, with prime mortgages comprising 2.9% of all serious delinquencies.

Though, there is some good news this week. Once again, from the OCC, loan modifications that reduce mortgage payments by 20% or more, a growing number right now, says the agency, significantly reduces the potential for serious delinquencies and foreclosures.

That’s the backdrop for mortgage rates this week, which, in another piece of good news, have fallen once more from their June highs. According to BankingMyWay’s national mortgage rate tracker, 30-year fixed rate mortgages fell from 5.64% last week to 5.47%. So it goes for 15-year fixed mortgages, which slid to 4.96% from 5.11% last week.

Three-year and five-year adjustable-rate mortgages (ARMs) were stagnant, holding at 5.02% and 5.25%, respectively. But one-year ARM holders really made out last week, plummeting from 4.96% to 4.06% for the week – a free-fall by any description.

ARM owners looking to refinance this week may want to reconsider. Rates are low enough, plus you don’t have to pay any closing costs with an ARM – if you can handle the volatility and afford to make the payments if and when rates go back up again. But, for now, ARMS are a pretty good deal.

Maybe that’s one reason for a refinancing decline last week. The Mortgage Bankers Association reports that refi’s fell 19% last week; and even new home purchases fell by 4.5%. These numbers usually signal significant uncertainty among home mortgage customers over the short-term fate of the housing market, the mortgage loan market, and the overall economy.

All in all, there’s a lot to chew on for both borrowers and lenders this week, but with the exception of the short-term drop in rates last week, it’s not exactly prime cut beef.

— For more ways to save, spend, invest and borrow, visit MainStreet.com.