Survey: Half of HARP Refinances Were Denied Previously

Demonstrating the extent to which eligibility has opened up in the last year, a new survey from ""loanDepot.com"":http://www.loandepot.com/ shows more than half of homeowners who recently refinanced through the Home Affordable Refinance Program (HARP) had been turned down for the program previously.

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For its survey, loanDepot talked to a random sampling of 253 HARP borrowers who refinanced through the company between December 1, 2012, and August 1, 2013.

According to loanDepot's findings, 51 percent of those recent HARP borrowers were turned down while the program was in its first iteration. Out of those, more than half had been turned down multiple times.

When asked why they were denied, most respondents said their home was too far underwater at the time (57 percent). Seventeen percent said their credit was too poor.

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Of the 49 percent that hadn't previously tried to refinance, many said they were not aware of HARP, while others weren't confident that they would qualify.

Reforms announced in December 2011 removed many restrictions from the program, granting access to previously ineligible homeowners. The expanded ""HARP 2.0"" removed the ceiling on eligible loan-to-value ratios--welcome news for the most severely underwater borrowers.

According to estimates from the Federal Housing Finance Agency, there are up to 2 million HARP-eligible borrowers who have little to no home equity and who could reduce their monthly payments with a refinance through the program.

""Many underwater HARP-eligible homeowners have been turned down before, and they now assume they can't get help,"" said Jim Svinth, chief economist for loanDepot. ""Requirements have changed, making it possible for loanDepot to give financial relief to even more homeowners.""

In other findings, loanDepot's survey found 87 percent of borrowers who refinanced through HARP are saving $1,200 or more a year after refinancing. Twelve percent reported savings of $6,000 or more per year.

To address misconceptions about the program and assist borrowers, loanDepot announced it is hosting a free educational ""webinar"":https://cc.readytalk.com/cc/s/registrations/new?cid=4u5na92lw5bf on October 16.