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HARP Activity Down Again in Second Quarter

refinanceThe total number of mortgage refinances in the United States experienced a slight increase in June, though overall activity for the quarter was down, according to the Federal Housing Finance Agency's (FHFA) Second Quarter 2014 Refinance Report.

Despite the increase in refinances, however, FHFA reports that many borrowers are still eligible to refinance through the government's Home Affordable Refinance Program (HARP) but have not. HARP-refinanced homes made up only about 15.7 percent of total refinances in Q2.

Fannie Mae and Freddie Mac have facilitated the completion of more than 19.5 million mortgage refinances since 2009. More than 3.1 million of those refinances have been through HARP.  Of the more than 344,000 homes refinanced in Q2 2014, more than 54,000 were through HARP—a significant drop from the 77,000 HARP refinances reported in Q1.

FHFA estimated there were more than 810,000 eligible borrowers in Q1 2014 that had not refinanced through HARP despite having a financial incentive to do so. Refinancing through HARP could mean an annual savings of almost $2,300 on the average on mortgages, according to the agency.

In an effort to reach out to those homeowners eligible for HARP refinances, FHFA has held town-hall style meetings in Chicago and Atlanta to provide information about HARP to those in areas with the highest concentration of HARP-eligible borrowers. Similar events are planned for Detroit and Miami.

HARP was scheduled to expire on December 31, 2013, but was extended until December 31, 2015 in order to assist more underwater borrowers refinance.

The year-to-date numbers for HARP refinances remain high in certain states despite the low national average, according to FHFA.

About 37 percent of refinances in Georgia were done through HARP, as were 35 percent of refinances in Florida. Both numbers were nearly double the year-to-date national average.

FHFA also reported that 15- and 20-year mortgages comprised more than 25 percent of HARP refinances for borrowers who were underwater on their mortgage loans.

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.
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