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HARP Refinance Report – August 2013

By on November 15, 2013 in Market Updates

HARP Refinance Report Aug 2013

Highlights from the most recent HARP Refinance Report provided by the FHFA shows that refinance volume continued to decrease in August after the mortgage rates began to rise in July from the low 3% range to mid 4% for a 30 year fixed rate.

However, 68,340 HARP refinances were completed in August, bringing the total number homeowners helped since inception to 2,886,856. HARP volume reached 23 percent of total refinances, with 17 percent of the loans refinanced through HARP were at a loan-to-value of 125 percent or greater. Additionally, borrowers with loan-to-value ratios greater than 105 percent accounted for 42 percent of the total volume of HARP loans.

According to a mid-program assessment of the Home Affordable Refinance Program conducted by the FHFA Office of Inspector General (OIG), near half of the four to five million anticipated borrowers have refinanced through the HARP refinance program since March 2009.

Here is a brief summary of their report:

The Federal Housing Finance Agency (FHFA), in coordination with the U.S.
Department of the Treasury (Treasury), announced the Home Affordable
Refinance Program (HARP or program) in March 2009. HARP is a
streamlined refinance program for loans owned or guaranteed by Fannie Mae
or Freddie Mac (collectively, the Enterprises) that is designed to assist
borrowers who are current on their loans, but have not been able to refinance
because they have little or no equity in their homes.

FHFA Office of Inspector General (OIG) conducted this program evaluation to
assess FHFA’s administration and oversight of HARP.

What OIG Found

When HARP was announced in March 2009, Treasury and FHFA estimated
that four to five million borrowers would have the opportunity to refinance
under the program. As of September 2011, however, fewer than one million of
those borrowers had refinanced. Based on consultations with lenders and
feedback from borrowers, FHFA directed the Enterprises to modify the
program, which resulted in HARP 2.0. The program is currently scheduled to
expire on December 31, 2015.

As a result of the initial HARP 2.0 program modifications and subsequent
changes made throughout 2012 and 2013, HARP refinance volume has
substantially increased. As of March 2013, 2.4 million HARP refinances had
been completed. It is difficult, however, to project how many HARP-eligible
loans will ultimately be refinanced. Several unknown variables, including
interest rates, lender participation, and borrowers’ willingness to refinance,
make any estimate uncertain.

Today, impediments to the program’s success remain. Educating borrowers
and encouraging their participation continues to be a major challenge. FHFA is
planning to address this by implementing a nationwide public education
campaign.

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About the Author

About the Author: Jessica Lucas is the managing editor for Mortgage Home Base, a top real estate finance blog dedicated to helping borrowers and home buyers understand the home loan process. Follow Jessica on Google +, and share your comments here. .
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