HARP Refinance Share Dropped in Second Quarter

Total refinances through completedrnthrough Freddie Mac and Fannie Mae (the GSEs) in the second quarter toppedrn344,000.  The Federal Housing FinancernAgency (FHFA) said that Fannie Mae accounted for 211,825 and Freddie Mac 132,688rnof the transactions.  Since 2009, thernfirst full year they were in federal conservatorship under FHFA, the two GSEs havernrefinanced the mortgages of more than 19.5 million homeowners.  </p

The percentage of these GSE loans whichrnwere refinanced through the Home Affordable Refinance Program (HARP) dropped torn16 percent during the quarter.  This markedrnthe first time the HARP share of refinancing had dropped below 20 percent sincernthe first quarter of 2012, about the time HARP guidelines were changed tornremove the cap on loan to value ratios.  HARPrnloans had a 21 percent market share in the first quarter of 2013 and a 22rnpercent share in the second quarter of 2013. rn</p

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A total of 54,041 loans were refinancedrnthrough HARP during the quarter, bringing the total to 3.1 million since thernprogram began.  Fannie Mae refinancedrnabout 1.88 million of those loans and Freddie Mac just over 1.3 million.  Primarily residences were the target of 2.6rnmillion of the transactions.  </p

FHFA estimates that as of the firstrnquarter of this year there were over 800,000 borrowers who appear eligible for andrnwho could benefit financially from a HARP refinance but who have not yetrnutilized the program.  Nationwide, thesernborrowers could save an average of almost $2,300 per year on their mortgages. rn</p

The number of completed HARPrnrefinances reported for deeply underwater borrowers continued to represent arnsignificant portion of total HARP volume. In June 2014, 9 percent of the loansrnrefinanced through HARP had a loan-to-value ratio greater than 125 percent.  </p

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Some states have much higherrnrates of HARP refinance than others.  InrnGeorgia, for example, 37 percent of refinances in the second quarter were throughrnHARP and in Florida 35 percent. Michigan, Illinois, and Nevada are also wellrnabove the national HARP average.</p

Borrowersrnwho have refinanced through HARP have a lower delinquency rate than thosernborrowers who are eligible but who have not refinanced through the program.</p

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More than 25 percent of all HARP refinances for underwater borrowers (thosernwith a loan-to-value ratio greater than 105 percent) were for 15- and 20-yearrnmortgages through the second quarter. rnHARP provides an incentive for borrowers to choose a shorter term loanrnwhen refinancing through the program.  </p

FHFA continues to reach out to borrowers who could benefit from the HARPrnprogram.  It recently held town-hallrnstyle events in Chicago and Atlanta to share information about the program withrncivic leaders.    

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