Despite the current, historically low-interest rate environment, homeowners are still stalling on refinancing their home.
Black Knight Financial Services' First Look at April mortgage data found that prepayment speeds, which are historically a good indicator of refinance activity, decreased in April, although interest rates are hovering near three-year lows.
According to the report, the monthly repayment rate came in at 1.26 percent for April, down 3.24 percent month-over-month and down 7.25 percent year-over-year.
Michael Reddington, EVP of Retail at Envoy Mortgage recently sat down with MReport to explain how lenders should handle refinance business at a time when rates are so low.
"I think borrowers with higher interest rates have already refinanced, but there are still plenty of homeowners who could benefit from today's interest rates and the increasing values in homes," Reddington said. "There is more equity in homes these days, providing the ability to cash out at a low interest rate for home improvements. The refinance business is still out there and there are still more borrowers to reach."
He continued, "The lenders that are getting that refinance business are continually staying in touch with their customers through emails and phone calls throughout the years. It's important for lenders to stay in front of the customers, educate them, and make sure that they understand that the lender is there for them and can save them money on their mortgage loans. This is the difference between companies that are bringing in that refinance business and companies that are not."
The total number of loans refinanced through the Home Affordable Refinance Program (HARP) fell in February as mortgage rates remained under 4 percent over the last three months.
According to the Federal Housing Finance Agency (FHFA) February 2016 Refinance Report,borrowers completed 6,424 refinances through HARP, bringing total refinances from the inception of the program to 3,393,217. In addition, HARP volume accounted for 5 percent of total refinance volume, where it has remained for quite some time.
The report showed that mortgage rates also decreased in February, with the average interest rate on a 30‐year fixed rate mortgage declining to 3.66 percent from 3.87 percent in January.
There is still a little more time for borrowers to refinance their home through HARP before it expires in December. The FHFA recently announced that it will be hosting its final webinar for the program on Tuesday, May 24, 2016 from 2 p.m. to 3 p.m. EDT. Click here to register.
The FHFA reported in its announcement that more than 325,290 homeowners are still eligible for HARP savings of $2,400 per year. The webinar is designed to reach those borrowers that have not refinanced before the end of the year.
The webinar will feature the following speakers: Megan Moore, Special Advisor, FHFA; Danielle Johnson-Kutch, Acting Chief, Homeownership Preservation Office, U.S. Department of the Treasury; Blake Hampton, Credit Risk Analyst, Freddie Mac; Robert Koller, Director of Credit Risk Management, Fannie Mae; Nicole Harmon, VP, Foreclosure Mitigation, NeighborWorks America; and Katrina Beaubien, Senior Product Manager, Quicken Loans.