WASHINGTON (AP) – Mortgage rates fell Monday, as investors reacted to the government’s takeover of Fannie Mae and Freddie Mac.

The takeover of the mortgage titans – they own or guarantee about half of all U.S. mortgages – will help borrowers who had been nervously waiting for the best time to get out of the adjustable-rate mortgages.

But it will do little to stem the dramatic rise in foreclosures. And so far, the government’s other programs to assist distressed borrowers in refinancing have had minimal impact.

The average interest rate for a 30-year fixed rate mortgage dropped 0.3 percent to 6.04 on Monday, according to HSH Associates.

“It’s going to restore confidence…with a lot of homebuyers that are right now sitting on the fence,” said Jim Gillespie, chief executive of Coldwell Banker Real Estate.

Mortgage bankers and brokers also are hoping the government will eliminate or reduce fees that the Fannie and Freddie have been charging lenders to protect against increased losses from mortgages they own or guarantee.

Those rising fees have frustrated many in the industry because they are squeezing out some borrowers. Lenders typically pass them along through higher mortgage rates or higher upfront costs.

Still, it remains to be seen whether Fannie and Freddie – under government control – will be able to do more to prevent foreclosures.

The companies already have increased payments to loan servicers – companies that collect mortgage payments on behalf of Fannie, Freddie and other lenders – to encourage them to help more borrowers work out their loan problems and avoid foreclosure.

John Courson, chief operating officer of the Mortgage Bankers Association, said that new leadership at Fannie and Freddie will provide an opportunity to review foreclosure-prevention practices. “Are there ideas that we can come up with that might be better and more effective?” he asked.

Consumer groups were already urging the government to place more pressure on Fannie and Freddie to aid borrowers in trouble.

“Since we are using tens of billions of dollars to bail out entities engaged in these lending practices, it’s time for the nation to demand those same entities fix it by restructuring loans and avoiding the further demise of the housing market,” Bruce Marks, chief executive of the Neighborhood Assistance Corporation of America, a Boston-based group that helps troubled borrowers.

On Wall Street, though there are fears that lawmakers and advocacy groups will push Fannie and Freddie into more financial troubles by being too lenient on borrowers facing foreclosures.

“Now you have people who are running the companies who interests are not aligned with the shareholders, but are politically aligned,” said Doug Dachille, chief executive of investment firm First Principles Capital Management in New York.

More legislation to help borrowers avoid foreclosure appears unlikely until next year at the earliest.

President Bush earlier this summer signed a bill that aims to prevent foreclosures by allowing an estimated 400,000 homeowners to swap their mortgages for more affordable loans, but only if their lender agrees to take a loss on the initial loan.

The Bush administration also has expanded guidelines for the Federal Housing Administration, which backs loans to borrowers with poor credit and small down payments. But that program has helped only a tiny number of borrowers who are actually behind on their mortgages.

Of the 356,000 borrowers projected to use the government’s refinance program through the year ending Sept. 30. – about 1.5 percent, or about 5,000 consumers, are likely to have been delinquent. The Bush administration says borrowers are taking advantage of the program before they fall into delinquency and notes that the program was expanded over the summer to allow more delinquent borrowers to qualify.

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