Refinancing through the revised Home Affordable Refinancing
Program (HARP 2.0) grew to a 33 percent share of all Fannie Mae and Freddie Mac
refinancing in June, surging from the 20 percent share the program posted in
April. The proportion of those
refinancings with very high loan to value (LTV) ratios also increased significantly.
It appears that the changes made to the HARP program, removing
the 125 percent LTV ceiling, reducing and/or eliminating some fees, and easing
lender risk, have worked. The program revisions
were announced last fall but did not really begin to roll out until early this year.
During June Freddie and Fannie refinanced a total of 382,539
loans. HARP refinancings for the month
numbered 125,866. While the HARP loans were
fairly evenly divided between the two government sponsored enterprises (GSEs),
Freddie Mac did less refinancing overall and slightly more HARP loans so had a much
higher share of those loans, 43.7 percent compared to 26.1 percent at Fannie
The total of HARP 2.0 loans written in the first six months of
this year was 422,969, surpassing the 400,024 written during all of 2011. Since the program was originated in April
2009 1,444,820 borrowers have refinanced through the program.
The number of severely underwater homeowners using the program
skyrocketed in June. The average number
of loans with LTVs over 125 percent averaged 2779 each month in the
February-May period but totaled 53,758 in June, 40 percent of the HARP
volume. The Federal Housing Finance
Agency which issued the HARP report said that lenders began to sell Fannie Mae
and Freddie Mac securities containing these high LTV loans on June 1.
The proportion of loans refinanced through HARP was double the
national average in the three states hardest hit by the housing downturn. HARP refinances represented two-thirds of GSE
refinancing in Nevada, Arizona, and Florida.
In those three states borrowers with LTVs greater than 105 percent
represented more than 80 percent of HARP volume compared to 62 percent