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WASHINGTON (TheStreet) -- In an encouraging sign for homebuyers, long-term mortgage rates dropped for the fourth straight week and approached their lowest levels since record-keeping began 38 years ago, according to Freddie Mac'sundefined weekly report, issued Thursday.

The average interest rate on a 30-year fixed mortgage declined to 4.87%, Freddie Mac said -- the second consecutive week below 5% and the lowest point since mid May, when they hit 4.82%. The average 30-year rate was 5.94% in October 2008.

The easing of credit for house buyers has led, of course, to an upswing in mortgage applications and refinancing. "Such low rates are spurring mortgage demand," Freddie's chief economist, Frank Nothaft, said in a press release. He noted that, according to numbers released by the Mortgage Bankers Association on Tuesday, more mortgage applications were filed in the week ended Oct. 2 than at any point since March 2008, before the credit and financial crises had become full blown.

"Compared to a year ago, consumers could shave almost $134 off their monthly mortgage payments on a 30-year fixed-rate loan for $200,000 by refinancing," Nothaft said.

But it wasn't all good news Thursday in the mortgage world. Freddie and

Fannie Mae's

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government regulator said in a Congressional hearing that the loan bundlers may need more bailout money -- in addition to the $96 billion they've already drawn down from a line of credit provided by the Treasury Department -- to deal with mounting mortgage delinquencies amid rising unemployment.

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"The short-term outlook for the enterprises remains troubled," Edward DeMarco, acting director of the Federal Housing Finance Agency, told the Senate Banking Committee on Capitol Hill.

Meanwhile, the Obama administration said Thursday that its $50 billion mortgage-relief program has helped some half a million homeowners refinance their loans. The program, which got off to a shaky start in March, reached that goal about month earlier than the government had expected.

-- Written by Scott Eden in New York

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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.