HARP Refinances Continue Decline in 3Q

The Federal Housing Finance Agency said 15,597 borrowers refinanced their mortgages through the Home Affordable Refinance Program in the third quarter.

The FHFA third quarter Refinance Report (http://www.fhfa.gov/AboutUs/Reports/ReportDocuments/3Q16-Refinance-Report.pdf) said while total refinance volume increased in September, as mortgage interest rates hovered at lows last seen in 2013, HARP refinances represented just 2 percent of total refinances. Total HARP refinances now stand at 3.434 million.

FHFA said 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. Nine states and one U.S. territory accounted for more than 60 percent of borrowers who remain eligible for HARP and have a financial incentive to refinance: Florida, Illinois, Michigan, Ohio, Georgia, New Jersey, Pennsylvania, Puerto Rico, New York and California.

FHFA also reported 242,512 borrowers remain eligible for HARP as of the second quarter of 2016. These 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. These borrowers could save, on average, $2,400 per year by refinancing their mortgage through HARP.

HARP expires on Sept. 30, 2017.