Refinances Surge under the Home Affordable Refinance Program (HARP)
Inman News recently published an article about the surge in home loan refinancing resulting from the the recent revisions to Home Affordable Refinance Program (HARP). Here are the key findings and latest statistics.
- The number of refinances completed through HARP in the month of May more than doubled last year’s mark. (67,456 from 25,475 in 2011).
- The Federal Housing Finance Agency (FHFA) announced many new changes to HARP.
- Changes include the elimination of the 125% Loan to value (LTV) cap as well the removal of many risk-based fees.
- HARP accounts for more than 20% of all refinances and 15% of all refinances completed in California.
- Underwater borrowers, those who owe more than their house is worth, accounted for 42% of HARP’s refinances in California during the month of May.
To get a feel for how big of an impact this is having in California, look at the US map below showing the concentration of mortgage refinancing applications by state.
HARP refinancings take off
Share of loans going to underwater borrowers also picking up
By Inman News, Tuesday, July 17, 2012.
As mortgage rates continued to hit new depths, the number of refinancings completed through the Obama administration’s mortgage refinance program more than doubled year over year in May, according to a monthly report from the Federal Housing Finance Agency.
Last fall, the FHFA, which regulates government-sponsored enterprises Fannie Mae and Freddie Mac, announced several changes to the Home Affordable Refinance Program (HARP) in an effort to boost participation.
The changes included lifting the previous 125 percent loan-to-value (LTV) cap on HARP refinancings, and releasing lenders who sign off on a refinanced loan from some legal liabilities associated with the original loan. The new HARP guidelines also eliminated some risk-based fees if homeowners refinanced into shorter-term mortgages that would get them out from negative equity situations more quickly.
HARP refinancings rose to 67,456 in May from 25,475 in May 2011. More than two-thirds of those refinancings were to borrowers with LTVs of 80 to 105 percent, meaning they either had equity in their homes or were only slightly “underwater.” But nearly a third of HARP refinancings were granted to borrowers above the 105 percent LTV threshold, meaning they owed considerably more on their mortgage than their home was worth.
