Refinance volume in January 2019 was similar to the relatively low volume of December 2018, according to the latest FHFA Refinance Report for January 2019. According to the report, mortgage rates fell slightly in January: the average interest rate on a 30‐year fixed rate mortgage fell to 4.46 percent from 4.64 percent in December.
The report also measured refinances completed through HARP, a program open to borrowers who are current on their mortgage with loans owned or guaranteed by Fannie Mae or Freddie Mac. Borrowers completed 438 refinances through HARP in January 2019, bringing total refinances from the inception of the program in 2009 to 3,494,833. HARP refinances made up one percent of the total refinance volume. In order to qualify for HARP, the current loan‐to‐value ratio must be 80 percent or higher, and in January, five percent of loans refinanced through HARP had a loan‐to‐value ratio greater than 125 percent. Additionally, borrowers with loan‐to‐value ratios greater than 105 percent accounted for 21 percent of the volume of HARP loans.
The report also found that borrowers who refinanced through HARP had a lower delinquency rate compared to borrowers eligible for HARP who did not refinance through the program.
According to the report, nine states and one territory made up 70 percent of the nation’s HARP refinances: Puerto Rico, Illinois, New Jersey, Florida, Michigan, Ohio, Pennsylvania, Maryland, Alabama, and Georgia. Puerto Rico holds the highest number of HARP refinances for the month, at 4,522. Illinois holds a higher than the national average number of HARP. According to the January 2019 report, HARP refinances represented 2 percent of total refinances in Illinois compared to 1 percent of total refinances nationwide over the same period. Additionally, underwater borrowers make up a large portion of HARP refinances. For example, as of January 2019, underwater borrowers represented 22 percent or more of HARP volume in Nevada and Florida.
Find the complete Refinance report here.