Rates on 30-year, fixed-rate mortgages dropped to 5.19 percent last week, the lowest level in 37 years, according to Freddie Mac. The lower rates have led to a surge in homeowners seeking to refinance.  However, homeowners who have defaulted on their mortgage payments or are “underwater”–owe more on their loan than their home is currently worth–may not be eligible for the new rates.

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