Total refinances through completed
through Freddie Mac and Fannie Mae (the GSEs) in the second quarter topped
344,000. The Federal Housing Finance
Agency (FHFA) said that Fannie Mae accounted for 211,825 and Freddie Mac 132,688
of the transactions. Since 2009, the
first full year they were in federal conservatorship under FHFA, the two GSEs have
refinanced the mortgages of more than 19.5 million homeowners.
The percentage of these GSE loans which
were refinanced through the Home Affordable Refinance Program (HARP) dropped to
16 percent during the quarter. This marked
the first time the HARP share of refinancing had dropped below 20 percent since
the first quarter of 2012, about the time HARP guidelines were changed to
remove the cap on loan to value ratios. HARP
loans had a 21 percent market share in the first quarter of 2013 and a 22
percent share in the second quarter of 2013.
A total of 54,041 loans were refinanced
through HARP during the quarter, bringing the total to 3.1 million since the
program began. Fannie Mae refinanced
about 1.88 million of those loans and Freddie Mac just over 1.3 million. Primarily residences were the target of 2.6
million of the transactions.
FHFA estimates that as of the first
quarter of this year there were over 800,000 borrowers who appear eligible for and
who could benefit financially from a HARP refinance but who have not yet
utilized the program. Nationwide, these
borrowers could save an average of almost $2,300 per year on their mortgages.
The number of completed HARP
refinances reported for deeply underwater borrowers continued to represent a
significant portion of total HARP volume. In June 2014, 9 percent of the loans
refinanced through HARP had a loan-to-value ratio greater than 125 percent.
Some states have much higher
rates of HARP refinance than others. In
Georgia, for example, 37 percent of refinances in the second quarter were through
HARP and in Florida 35 percent. Michigan, Illinois, and Nevada are also well
above the national HARP average.
who have refinanced through HARP have a lower delinquency rate than those
borrowers who are eligible but who have not refinanced through the program.
More than 25 percent of all HARP refinances for underwater borrowers (those
with a loan-to-value ratio greater than 105 percent) were for 15- and 20-year
mortgages through the second quarter.
HARP provides an incentive for borrowers to choose a shorter term loan
when refinancing through the program.
FHFA continues to reach out to borrowers who could benefit from the HARP
program. It recently held town-hall
style events in Chicago and Atlanta to share information about the program with