Rates fall again
  30-year fixed 15-year fixed 1-year ARM
This week’s rate: 6.57% 6.05% 4.83%
Change from last week: -0.03% -0.02% -0.07%
Monthly payment: $955.02 $1,269.84 $789.72
Change from last week: -$2.97 -$1.62 -$6.37

Here’s a crass question: Does WorldCom’s bad news spell good news for mortgage shoppers?

“Maybe the question is a little crass, but there is some truth to it,” says Corey Redfield, economist for US Bancorp Piper Jaffray.

The fallout from the WorldCom accounting scandal didn’t fully hit the Bankrate.com national survey of large lenders this week, but it likely will show up next week as lower rates.

The benchmark 30-year fixed-rate mortgage fell 3 basis points to 6.57 percent, according to this week’s survey. A basis point is one-hundredth of 1 percentage point. The mortgages in this week’s survey had an average total of 0.45 discount and origination points.

WorldCom, a giant communications company, misstated almost $4 billion of expenses in the last five quarters. Sort of like claiming your grocery spending as mortgage interest on your taxes. WorldCom will lay off 17,000 employees and might declare bankruptcy. Investors will lose millions or billions of dollars.

Too bad for them. What’s in it for you?

Plenty, if you’re shopping for a mortgage. Like roadkill flung into a swimming pool, the WorldCom scandal creates ripples in the stock and bond markets.

Investors feel frightened that financial shenanigans will come to light at other companies, so they flee to the safety of U.S. Treasuries. They bid up the prices of Treasury notes, which depresses the yields. Mortgage rates tend to move in the same direction as yields on 10-year Treasury notes.

Redfield says, “You don’t want to take it too far, but you could make the case that the weakness in the stock market could be good for the consumer. A lot of individuals, especially in the middle class, are far more sensitive to the bond market than the stock market. What I mean by ‘the bond market’ is mortgage rates.”

A depressed stock market means middle-class people have paper losses in retirement accounts that they won’t tap for years, Redfield says.

The same depressed stock market means money in the bank for middle-class people who refinance their mortgages at a lower interest rate, or who can buy houses at mortgage rates of less than 7 percent.

“Obviously, if stocks fall 2,000 points from here, I won’t make that case, but if they stay on the weak side, you can make the case that for a lot of consumers, it’s good,” Redfield says.

The Federal Reserve and other regulators will watch closely for the effects on Wall Street, says Kenneth Thomas, finance lecturer at the Wharton School of Business.

Attribute this week’s decline in rates to overall weakness in the stock markets and investors’ worries about the possibility of more accounting scandals.

Bankrate.com conducts its weekly mortgage rate survey on Wednesdays. The WorldCom scandal broke Tuesday evening, and it’s not certain that all lenders in the survey had dropped rates yet in reaction to the WorldCom fallout.