After five weeks of declines, rates on most mortgages moved higher this week, following long-term bond yields that rose after an upbeat employment report, Freddie Mac's chief economist said Thursday.

The 30-year fixed-rate mortgage averaged 4.81% for the week ended Dec. 10, up from last week's 4.71% average, according to Freddie Mac's weekly survey of conforming mortgage rates. The mortgage averaged 5.47% a year ago.

Fifteen-year fixed-rate mortgages averaged 4.32%, up from 4.27% last week. They averaged 5.20% a year ago. And 5-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.26%, up from their 4.19% average last week. The ARM averaged 5.82% a year ago. But average rates on 1-year Treasury-indexed ARMs dropped slightly this week. The ARM averaged 4.24%, down from 4.25% last week and 5.09% a year ago.

"Following an upbeat employment report, long-term bond yields rose slightly and fixed mortgage rates followed," said Frank Nothaft, Freddie Mac chief economist. "The economy shed only 11,000 jobs in November, far fewer than the market consensus forecast, and the unemployment rate unexpectedly fell to 10%. In addition, revisions added 159,000 jobs to September and October."

Still, mortgage rates remain low compared with the same time a year ago, he said. "Notwithstanding, rates on 30-year fixed mortgages are almost 0.7 percentage points below those at the same time last year. This translates into an $81 lower monthly payment on a $200,000 conventional mortgage," he said.

Mortgage application volume was up a seasonally adjusted 8.5% for the week ending Dec. 4, compared with the previous week, the Mortgage Bankers Association reported on Wednesday. The weekly MBA survey also reported that rates on fixed-rate mortgages were on the rise.

A total of 31,382 homeowners have gotten a permanent home loan modification since details of the program were announced in March, the Treasury Department said Thursday. There are more than 728,000 trial modifications underway.

Trial modifications last for three months before becoming eligible for permanent status; during that time, homeowners must remain current with their payments and submit documentation showing proof of income and that they are owner-occupants.

On Thursday, the Treasury Department released a list of servicers and the number of permanent modifications each has made.

About a quarter of borrowers in trial modifications already are in default again on their mortgages, according to Treasury, which has criticized banks for not doing more to make trial modifications permanent. Servicers have countered that borrowers have frequently failed to provide documentation of income or other paperwork.

Wells Fargo, for example, says that it has 99,674 modifications underway, including trials. Of those that have completed the three-month trial as of Nov. 30, 40% are either ready to convert to a permanent loan, or have converted. But 45% haven't provided all the necessary documentation.

The remaining borrowers who have made three trial payments were determined to be ineligible for Home Affordable Modification Program (HAMP) modifications after a review of the documents they submitted.

Mark Zandi at Moody's Economy.com says the program as structured now won't do enough to reduce the foreclosure problem. "At best, without substantial changes in the plan, we'll get (a total) of 500,000 to 750,000 permanent modifications, which is well below what the administration is hoping for."

The administration hopes the $75 billion plan will help up to 4 million homeowners get more affordable monthly mortgages as servicers rework loans to lower payments.

Last week, the government announced a Dec. 31 deadline to convert about 375,000 borrowers with trial modifications into permanent modifications. They also threatened banks with financial penalties for failing to make progress.

Treasury officials on Thursday said they were on track to meet their goals in the next several years, and added that borrowers who get modifications are saving an average of $550 a month.

But as criticism mounts, efforts have been revived to pass legislation to allow federal judges to cut interest rates, reduce loan balances and lengthen mortgage terms in bankruptcy court. Rep. Barney Frank, D-Mass., head of the House Financial Services Committee, said this week that he'll back the measure, which will be attached to broader legislation.

Similar legislation failed to get Senate support in the spring.

Whether you are buying a house, an investment property, or refinancing a current mortgage, there is a long list of variables that determine what rates you will pay. In addition to considering rates, there are still many types of loans available, each with their own eligibility criteria, that can affect your rates, including:

Conforming/Conventional: Conforming loans are those that follow Fannie Mae/Freddie Mac lending guidelines, because approximately 87% of all conforming mortgages are still sold to Fannie or Freddie. Typically conventional loans have a maximum loan amount of 417,000, regardless of where you live in the country.

Jumbo: Jumbo loans are those with loan amounts/balances above $417,000
High balance conforming: for 2009, the loan amounts that are considered “conforming” have been increased, pursuant to the American Recovery and Reinvestment Act. In areas where the average home prices are higher than Fannie/Freddie conforming limits, “High balance conforming” loans are now eligible for special rates, substantially lower than Jumbo loan rates, but a bit higher than conforming loan rates. Click here to determine the maximum loan amounts in your area to qualify for High balance conforming loans.

Since 30 year fixed rate mortgages hit a low of around 4.5% for most states at the end of November, they have been rising almost steadily.  The average rate being offered for the same loan, as of the market open this morning was 4.88%, up from 4.79% at the close of trading just last week. 

I would like to take this opportunity to repeat something I have said on many occasions - rates quoted are good only when they are quoted.  Mortgage rates are very volatile, and subject to the yields on both the 10 year Treasury bond and the yield on mortgage backed securities.  When those yields move up, mortgage rates move up too.  There are lenders out there who sometimes offer special rates for fixed periods of time, and some states offer lower rates than others, so the best I can do is quote the best rates out there at any given time.  Mortgage rates did rise slightly again today as the yield on the underlying bonds rose.  However, expectations are that rates will remain relatively low for the next few months.