26 Nov In 2012, the HARP Program Will Have Served 1 Million Borrowers
The Federal Housing Finance Agency (FHFA) recently reported that in August 2012, close to 99,000 home owners utilized the HARP program (or Home Affordable Refinance Program) to refinance their mortgages. FHFA says part of HARP’s attraction is record-low mortgage rates and program enhancements that included the elimination of its maximum loan-to-value (LTV) ratio limit. HARP pertains to borrowers with Fannie Mae or Freddie Mac loans.
FHFA began the HARP program in 2009, and since then, Fannie Mae and Freddie Mac have financed more than 1.6 million loans through the program. FHFA says that by the end of 2012, one million borrowers will have taken advantage of HARP’s ability to help them into new mortgages with lower interest rates. Borrowers have been taking advantage of the opportunity to lower their interest rates as part of the program. During the month of August, close to 25% of refi’s were Fannie Mae and Freddie Mac loans. Almost half of the total refi’s in August came from Nevada, Arizona, and Florida, the states hit hardest by the downturn in the housing market.
Additionally, borrowers with LTV ratios higher than 105% accounted for more than 70% of HARP refi’s in Nevada, Arizona, and Florida, while more than 60% were concentrated in Idaho and California. While many borrowers were attracted to the lower interest rates, some underwater borrowers were interested in getting into shorter-term 15- and 20-year mortgages as part of the program. Incidentally, almost 18% of HARP refinances were done for this reason.
For more information on this topic, click here.