Tag Archives: HARP

Fannie Mae and Freddie Mac released new representations and warranty guidelines for lenders Tuesday to clarify lenders├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ó risk regarding repurchase claims and define steps lenders can take to challenge repurchase claims they feel are without grounds. Under the new guidelines, if a loan is current for 36 consecutive months, lenders ├â┬ó├óÔÇÜ┬¼├àÔÇ£will be relieved of certain repurchase obligations,├â┬ó├óÔÇÜ┬¼├é┬Ø according to the Federal Housing Finance Agency, regulator of Fannie Mae and Freddie Mac.

While FHFA reported a month-to-month drop in HARP refinances, volume under the program remains high, with numbers in the first half of the year (more than 519,000 as of the end of July) already outshining all of 2011's HARP volume. Given the government's estimate that up to 4 million loans could be eligible under the program and FBR's expectation that approximately 6 million borrowers may qualify, the firm expects that originators will continue to see strong volume in the near future.

Lawmakers introduced a new bill on Monday with plans to once more revamp the Home Affordable Refinance Program for current borrowers with eligible loans with Fannie Mae and Freddie Mac. Sens. Barbara Boxer and Robert Menendez, among others, drafted the Responsible Homeowner Refinancing Act to increase lender competition, open up refinance opportunities to all current borrowers with government-backed mortgages, and strike through appraisal costs and upfront fees on home loans. If the bill passes the House, lenders will begin to compete more often with other lenders.

As the housing market and the overall economy crawl languidly toward an elusive recovery many believe will still take years to achieve, President Barack Obama suggests the key to progress is a broad housing refinance plan. Obama endorses a bill that would allow underwater homeowners to refinance at current interest rates, which continue to wallow near historic lows. A few senators have proposed bills recently to allow more homeowners to refinance their mortgages.

Ellie Mae released its most recent Origination Insight Report Wednesday, revealing that July├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós closing rate for all loan applications fell from June├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós total. The report draws data from a sampling of loan applications that go through Ellie Mae├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós network and mortgage management software. To get a meaningful view of lender ├â┬ó├óÔÇÜ┬¼├àÔÇ£pull-through,├â┬ó├óÔÇÜ┬¼├é┬Ø the company reviewed a sample of applications initiated in April to come up with a closing rate for July. Ellie Mae found that 45.8 percent of all applications closed in July.

For borrowers who refinanced in the second quarter, fixed-rate mortgages dominated consumer preferences. Among those who refinanced in Q2, more than 95 percent opted for a fixed-rate mortgage, according to the Freddie Mac Quarterly Product Transition report. For those who had a hybrid ARM, 81 percent transitioned into a fixed-rate loan during the second quarter; the percentage represents the highest share in two years. In contrast, for those with a 15-year fixed rate loan, 2 percent transitioned into a hybrid ARM.

HARP-assisted refinances drove record refinance activity in the month of June, FHFA revealed Tuesday. The agency released its Refinance Report for June 2012, showing that refinance volume remained strong in June as mortgage rates fell to all-time lows. An estimated 33 percent of refinance volume was done through HARP, the highest percentage since HARP's inception. The report revealed that at the end of June, Freddie Mac and Fannie Mae had refinanced 422,969 loans through HARP in 2012, more than in 2011.

Freddie Mac announced Tuesday its plans to expand on its Relief Refinance Mortgage Program by aligning separate mortgage requirements. The GSE announced that it will align requirements for mortgages with loan-to-value ratios that are equal to or less than 80 percent with those for mortgages with LTV ratios greater than 80 percent. The alignment is expected to eliminate many of the lender├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós selling representation and warranty responsibilities on loans being refinanced. Details are scheduled to be announced to lenders by mid-September.

More applications ticked up as record-low mortgage rates spurred refinance applications to their highest level since April 2009. The Mortgage Bankers Association found that applications increased 0.9 percent from the week before. The Refinance Index climbed by 2 percent to reach the highest level in three years, with the refinance share of activity ticking up to 81 percent of application volume from 80 percent last week. The adjustable-rate mortgage share of activity amounted to 4 percent of total volume from the week before.

More underwater borrowers are choosing to refinance their mortgages under the Home Affordable Refinance Program than at any time since the government program launched in 2009, according to the Federal Housing Finance Agency. The regulatory agency released a report Monday that found total refinance volume up by 20 percent in May. The reasons why? According to the FHFA, record-low interest rates for 30-year fixed-mortgages couple with recent modifications to HARP to create the conditions for a refi boom.