Mortgage rates held relatively steady over the last week, and homeowners continued to apply for refinancing.

The benchmark 30-year, fixed-rate mortgage rose 5 basis points to 5.23 percent, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week’s survey had an average total of 0.47 discount and origination points. One year ago, the mortgage index was 6.11 percent; four weeks ago, it was 5.19 percent.

The benchmark 15-year, fixed-rate mortgage rose 4 basis points to 4.76 percent. The benchmark 5/1 adjustable-rate mortgage fell 1 basis point to 5.11 percent.

The Federal Reserve says its current policy during the financial crisis is to keep mortgage rates low. Fed officials have said this repeatedly — as recently as Monday, in a speech by Vice Chairman Donald Kohn. The effort seems to be working. Bankrate’s benchmark 30-year, fixed rate has been under 5.5 percent since the beginning of February.

Weekly national mortgage survey
Results of Bankrate.com’s April 22, 2009, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan:
30-year fixed 15-year fixed 5-year ARM
This week’s rate: 5.23% 4.76% 5.11%
Change from last week: +0.05 +0.04 -0.01
Monthly payment: $909.09 $1,284.27 $896.88
Change from last week: +$5.09 +$3.40 -$1.02

According to the Mortgage Bankers Association, four of five mortgage applicants are homeowners seeking to refinance with today’s low rates. A lot of these potential borrowers wind up deeply frustrated by high fees and confusing rules.

Over the last year or so, Fannie Mae and Freddie Mac have been adding fees to compensate for risks. These fees are imposed on lenders, which then pass them along to borrowers.

The fees can add up. Someone with a credit score of 710 getting a refinance for 90 percent of the home’s value gets dinged with a risk-based pricing fee of three-quarters of 1 percent, or $750 on a $100,000 loan. If the home is a condominium, that’s another charge of three-quarters of a percentage point. If the borrower has a home equity line of credit, add a fee of one-half of 1 percent. If the loan is for less than $100,000, that’s another fee of 0.5 percent to 1.5 percent of the loan amount.

In other words, someone with a 710 credit score refinancing a $90,000 loan on a condo and keeping a HELOC intact would pay risk-based pricing fees of 2.5 percent of the loan amount, or $2,250. That’s on top of the lender’s origination charges, the appraisal fee and other costs.

Snags in Obama plan

Then there’s the Obama administration’s Making Home Affordable refinancing plan, which is running into more snags than a pair of silk stockings in a thistle patch. The problem seems to be a lack of communication among lenders, mortgage insurance companies, Fannie Mae and Freddie Mac, and the federal government.

Case in point: Borrowers with mortgage insurance are being told that they can’t refinance yet under the Making Home Affordable plan. Bank of America (and Countrywide, which BofA just absorbed) says it will refinance home loans under the Obama plan in two phases: first, those without mortgage insurance, and later, those with mortgage insurance. Customers of Wells Fargo say they are told something similar.

A Bank of America spokeswoman says the bank is refinancing loans in two phases because mortgage insurance companies have not implemented the Obama plan yet.

Meanwhile, it’s not clear that employees of Fannie Mae and Freddie Mac are aware that big banks are refinancing loans in phases, depending on whether the loans have mortgage insurance. And some mortgage brokers insist that loans with mortgage insurance will never be refinanced under the Obama plan.

And no one in the federal government seems to want to step up and rectify the confusion.