Declining HARP Volume Matches Broader Refinance Trends

Increasingrnmortgage rates eroded refinancing overall in the third quarter and refinancingrnthrough the Home Affordable Refinance Program (HARP) was no exception.  The Federal Housing Finance Agency (FHFA)rnsaid today that HARP refinances in the third quarter totaled 203,536, down fromrn279,933.  This matches the sharp decline in overall refinancing, from 1.28 million torn898,120 loans.  Thus the HARP share ofrnloans refinanced through the two government sponsored enterprises (GSEs) wasrnunchanged from Q2 at 23 percent. </p

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NonethelessrnHARP lending fell substantially in every month of the quarter, from 79,000 inrnJuly to 68,000 in August, and 56,000 in September although the program’s marketrnshare also rose each month by one percentage point to 24 percent in September.  As always, the bulk of the HARP loans werernpurchased or guaranteed by Fannie Mae with a total of 129,971 loans for thernquarter compared to 73,565 for Freddie Mac. To date, more than 2.9 millionrnhomeowners have refinanced through HARP since the program began in April 2009. </p

Of thern203,536 HARP loans originated in the third quarter 128,836 had loan-to-value (LTV)rnratios between 80 percent and 105 percent (63.3 percent) and those with LTV’srnexceeding 125 percent numbered 33,583 or 16.5 percent.</p

HARP continued to account for arnsubstantial portion of total refinance volume in certain states. Through thernthird quarter, HARP refinances represented 57 percent of total refinances inrnNevada and 49 percent of total refinances in Florida, more than double the 22rnpercent of total refinances nationwide over the same period.  Underwater borrowers were disproportionally representedrnamong HARP refinancers in same states as well. rnYear to date through September 2013, underwater borrowers represented 58rnpercent or more of HARP volume in Nevada, Arizona and Florida.</p

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FHFA said that over the course ofrnHARP’s history loans originated for the program have consistently performedrnbetter than the loans of people who were eligible to refinance through HARP butrnchose not to do so.</p

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