FHFA: HARP Refinances Continue Steady Decline

Home Affordable Refinance Program activity fell to its lowest level since 2009, the Federal Housing Finance Agency said.

The agency, which oversees Fannie Mae, Freddie Mac and the Federal Home Loan Banks, said just 18,310 borrowers refinanced their mortgages through HARP as of June 30. Its second quarter Refinance Report said while total refinance volume increased in June, as mortgage interest rates edged lower, HARP refinances represented just 4 percent of total refinances, the lowest percentage since second quarter 2009, when the program was first launched.

Total HARP refinances now stand at 3.418 million. FHFA estimated more than 323,000 U.S. borrowers remain eligible for HARP and who have a financial incentive to refinance. These so called “in-the-money” borrowers meet the basic HARP eligibility requirements; have a remaining balance of $50,000 or more on their mortgage; have a remaining term on their loan of greater than 10 years; and their mortgage interest rate is at least 1.5 percent higher than current market rates. FHFA said these borrowers could save, on average, $2,400 per year by refinancing their mortgage through HARP.

Other report highlights:
–Through the second quarter, 26 percent of HARP refinances for underwater borrowers were for shorter-term 15- and 20-year mortgages, which build equity faster than traditional 30-year mortgages.
–10 states account for more than 60 percent of borrowers who remain eligible for HARP and have a financial incentive to refinance: Florida, Illinois, Ohio, Michigan, Georgia, Pennsylvania, New Jersey, California, New York and Maryland.

HARP is scheduled to sunset this Dec. 31.