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HARP Draws Fewer Borrowers as Time Goes On

refinance-appFor the third quarter, GSE-backed mortgages refinanced through the Federal Housing Finance Agency (FHFA)’s Home Affordable Refinance Program (HARP) represented only 2 percent of all refi volume, only a fraction of its peak of 27 percent in Q2 2012.

In October, the share of refis completed through HARP as a percentage of total refis did not improve as the program heads into its final year. Approximately 3,900 refinances were completed through HARP during the month, representing approximately 2 percent of total GSE refi volume, according to the FHFA’s Refinance Report for October 2016 released Thursday.

In October, HARP refis were on a pace to equal their Q3 total of close to 16,000, according to FHFA. In all, 3,438,437 refinances have been completed through HARP since the program’s inception in April 2009.

HARP numbers have been shrinking since the third quarter of 2012 when they peaked at 319,000 for the three-month period. Total HARP refi volume topped 200,000 each quarter from Q2 2012 through Q3 2013, according to FHFA.

Originally set to expire at the end of 2013, HARP’s expiration date was extended to the end of 2015, then the end of 2016. In August 2016, HARP was extended until September 2017. 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.

FHFA has made attempts to reach borrowers eligible for HARP through a series of outreach events in cities with the most eligible borrowers (Chicago, Atlanta, Detroit, Miami, Newark, and Phoenix), webinars, websites, and social media campaigns.

Approximately 4 percent of the loans refinanced through HARP in October had an LTV ratio of greater than 125 percent, according to FHFA.

Click here to view the entire FHFA Refinance Report for October 2016.

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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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