HARP Sees Continuing Drop in Volume

Mortgage & Real Estate

Loans made through the Home Affordable Refinancing Program have fallen for four consecutive quarters and have dropped by 36% since the third quarter of 2012, according to a new report by the Federal Housing Finance Agency.

The third quarter FHFA report shows refinancings of high LTV loans under the Home Affordable Refinance Program dropped to 203,500 in the third quarter from 319,500 in 3Q12. From second quarter to third quarter, HARP volume declined by 27%.

Meanwhile, all single-family refinancings by Fannie Mae and Freddie Mac seller/servicers, including HARPs, totaled 898,100 in the third quarter, down 29% from the second quarter.

This shows that quarter-over-quarter, HARP refis are holding up a little better than regular refinancings.

However, refinancings of the higher loan-to-value GSE loans are seeing larger declines. Refinances of conventional loans with loan-to-value ratios above 125% totaled 33,600 in 3Q, down 36% from the prior quarter.

GSE servicers refinanced nearly 61,300 loans with LTVs greater than 105% and up to 125% in 3Q, down 33% from 2Q.

(HARP refinancings involve Fannie and Freddie loans with loan-to-value ratios greater than 80%. The Home Affordable Refinance Program is designed to help borrowers who are current on their payments but are underwater or face other issues that make it difficult to refinance.)

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