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HARP-Incentivized Borrowers are Concentrated

refinance-appMore than half of the borrowers who could benefit from refinancing their mortgage loan through the Federal Housing Finance Agency (FHFA)’s Home Affordable Refinance Program (HARP) are concentrated in 10 states, according to the Agency’s November 2016 Refinance Report released Tuesday.

Approximately 242,512 borrowers nationwide are eligible and have an incentive to refinance through HARP as of June 30, 2016, according to FHFA, and approximately 60 percent of them are located collectively in Florida, Illinois, Michigan, Ohio, Georgia, New Jersey, Pennsylvania, Puerto Rico, New York, and California. The state with the largest population of borrowers with an incentive to refinance through HARP as of June 30 last year was Florida with 28,772.

The FHFA has made a push to reach HARP-eligible borrowers who have an incentive to refinance through the program by conducting outreach events in the cities with highest concentration of borrowers with an incentive to refinance through HARP (Chicago, Atlanta, Detroit, Miami, Newark, and Phoenix). The agency has also hosted webinars, websites, and social media campaigns in an effort to try and reach these borrowers.

Since HARP was launched in April 2009 as a way to help underwater borrowers lower their monthly mortgage payments, more than 3.44 million borrowers with GSE-backed loans have refinanced through HARP—including the 4,530 who did so in November 2016, according to FHFA.

HARP refinances made up 2 percent of all refinances completed by the GSEs in November, according to FHFA. At their peak, HARP refinances comprised 26 percent of all GSE-completed refinances (in Q3 2012, when 319,000 refis were completed).

HARP is scheduled to expire on September 30, 2017, and the FHFA plans to replace it late in the year with a high LTV refinance option. Of the 4,530 borrowers who refinanced with HAMP in November, 5 percent of them had an LTV ratio of greater than 125 percent, according to FHFA.

To be eligible for HARP, borrowers must have a loan owned or guaranteed by Fannie Mae or Freddie Mac, have a loan originated on or before May 31, 2009, have a current LTV of greater than 80 percent, and be current on mortgage payments at the time of the refinance. Borrowers are allowed one late payment in the 12 months prior to the refinance as long as it did not occur in during the six-months period before the refinance. FHFA estimates these borrowers save an average of approximately $2,400 per year on mortgage payments.

Click here to view the FHFA’s complete refinance report for November 2016.

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.
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