Just a little over a year after the Home
Affordable Refinance Program (HARP) was substantially revised into HARP 2.0 it
has reached nearly as many homeowners as in the two-and-a-half years that
preceded the revisions. In November 2012
nearly 130,000 homeowners refinanced through HARP, bringing the total transactions
through the program since its inception in April 2009 to 2.09 million. About
1.04 million of these have occurred since HARP 2.0 became effective in December
In November Fannie Mae refinanced 77,301
home mortgages through HARP, 22 percent of all refinancing it did that month
and Freddie Mac had 52,445 HARP refinances or 23.4 percent.
The revisions to
HARP removed the existing 125 percent cap on loan-to-value ratios. About one fifth of the loans refinanced since
that time have had LTV ratios above 125 percent. In November,
46 percent of the loans
refinanced through HARP had loan-to-value
(LTV) ratios greater than 105
and 24 percent
greater than 125 percent.
HARP is especially high in some of the states hardest hit by price declines and
foreclosures. In Nevada, for example,
HARP accounted for 68 percent of total refinancing, nearly triple the national
average of 23 percent and in Florida 56 percent of refinances were through
percent of underwater homeowners refinancing through HARP opted for shorter term
15- or 20-year mortgages which build equity faster than the traditional 30 year
mortgage. Also, HARP 2.0 provides
incentives for borrowers to move into shorter term mortgages including
reduction of some risk-based fees.
change was added to the November summary.
Fannie Mae has always reported on HARP refinancing for second homes and
investment properties. Freddie Mac's
reporting has now been aligned with Fannie Mae's which added 160,280 refinances
to the cumulative HARP numbers. The breakdown by property type over the life of
HARP is 1,834,325 primary residences, 67,255 second homes, and 186,980