The Home Affordable Refinance Program (HARP), established in 2009 to assist homeowners unable to access a refinance because of a decline in their home value, saw 44,136 homeowners take advantage of the program in the third quarter of 2014. This brings total number of refinances through HARP, from the inception of the program, to 3,233,061.
The program is designed to provide borrowers with an opportunity to refinance by permitting the transfer of existing mortgage insurance to their newly refinanced loan, or by allowing those without mortgage insurance on their previous loan to refinance without obtaining new coverage.
HARP volume represented 11 percent of total refinance volume in the third quarter of 2014, 9 percent of which had a loan-to-value ratio greater than 125 percent. Year-to-date through September 2014, 25 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. Over the same time period, HARP refinances represented 33 percent of total refinances in Georgia and 31 percent in Florida, nearly double the 16 percent of total refinances nationwide over the same period.
Also, borrowers who refinanced through HARP had a lower delinquency rate compared with borrowers eligible for HARP who did not refinance through the program. To be eligible, the loan must be owned by Fannie Mae or Freddie Mac and have been originated on or before May 31, 2009. Current loan-to-value ratio – LTV – (outstanding mortgage balance/home value) must be greater than 80 percent. There is no LTV ceiling. The borrower must be current on their mortgage payments at the time of the refinance. The borrower is allowed one late payment in the past 12 months, as long as it did not occur in the 6-months prior to the refinance.