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HARPing on Fannie Mae, Freddie Mac Refinancing

Fannie Mae

The Federal Housing Finance Agency reported that Fannie Mae and Freddie Mac completed 234,716 refinances in Q1 2019, with 901 loans refinanced through the Home Affordable Refinance Program (HARP). The total number of HARP refinances since the inception of the program in 2009 is 3.49 million.

The report added that an increase was found in the volume of total refinances in March as mortgage rates have seen a steady decline. The average interest rate on a 30-year fixed rate mortgage fell to 4.27% in March from 4.37% in February.

Borrowers who refinanced through HARP had a lower delinquency rate compared to borrowers eligible for HARP and did not refinance, the report states.

A total of 0.41% of total refinance volumes were represented through HARP, which is a decrease from 1% from Q4 2018.  

The 901 refinances through Q1 2019 is a 15% decrease from Q4 2018 when there were 1,390 refinances.

Of the 3.49 million refinances through HARP from April 2009 through March 2019, 2.9 million refinances were for primary residences, 110, 922 were for second homes and 464,791 were for investment properties.

According to a report from Black Knight, servicer retention hit a record low in Q1 2019 as customer retention became increasingly difficult. Black Knight notes that around 18% of borrowers remained with the same servicer post-refi, the first time the retention rate has dropped below 20% since at least 2005.

Black Knight stated that customer retention has become increasingly difficult as a volatile refinance market and greater rate sensitivity shrink the number of remaining refinance candidates, further heightening competition.

According to Black Knight’s Data & Analytics Division President Ben Graboske, low retention rates have created some challenges.

"In Q1 2019, fewer than one in five homeowners remained with their prior mortgage servicer after refinancing their first lien,” Graboske said. “That is the lowest retention rate we’ve seen since Black Knight began tracking the metric in 2005. Anyone in this industry can tell you that customer retention is key—not only to success, but to survival.”

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.
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