The Federal Housing Finance Agency (FHFA) has released its November 2012 Refinance Report, which shows that Fannie Mae and Freddie Mac have reached a new milestone and refinanced more than 2 million loans through the Home Affordable Refinance Program (HARP).

In November alone, nearly 130,000 homeowners refinanced their mortgage through HARP, making it the second biggest month in 2012.

Between January and November of 2012, nearly 1 million loans were refinanced through HARP, more than in any single year since the program began. The continued high volume of HARP refinances is attributed to record-low mortgage rates and program enhancements implemented in 2012.

Also in the report:

• HARP volume represented 23 percent of total refinance volume in November 2012.
• In November, 46 percent of the loans refinanced through HARP had loan-to-value (LTV) ratios greater than 105 percent, and 24 percent had LTVs greater than 125 percent.
• In November, 17 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.

More info

The FHFA July Refinance Report shows a key milestone was reached when more than 519,000 loans were refinanced through Fannie Mae and Freddie Mac under HARP since the beginning of this year. The continued high volume of HARP loans is attributed to record-low mortgage rates and program enhancements announced last year including removal of the loan-to-value (LTV) ceiling for borrowers who refinance into fixed rate loans and the elimination or lowering of fees for certain borrowers.

Also in the report:

• Fannie Mae and Freddie Mac refinanced 519,339 loans in the first seven months of this year through HARP – more than all HARP refinances – 400,024 – last year.
• Since the program’s inception in 2009, Fannie Mae and Freddie Mac have financed more than 1.5 million loans through HARP.
• Borrowers in June and July 2012 with LTV ratios greater than 105 percent accounted for more than half the volume of HARP loans as lenders began to sell Fannie Mae and Freddie Mac securities containing these loans with LTV ratios greater than 125 percent as of June 1.
• In July, 20 percent of underwater borrowers chose shorter-term 15- and 20-year mortgages, which help build equity faster.

More info

New York Times – More homeowners who are “underwater” or owe more on their homes than they are worth, have been taking advantage of an expanded Home Affordable Refinance Program to refinance their loans and obtain lower interest rates, according to a report by the Federal Housing Finance Agency.

Read the full story 

San Francisco Chronicle – HARP 2 is starting to pay off for some deeply underwater homeowners.  Last fall, the government said it would remove the 125 percent loan-to-value cap and loosen other restrictions that had prevented many homeowners from refinancing under the original HARP.

Read the full story

CNN Money – The government is changing its Home Affordable Refinance Program (HARP), making it easier for homeowners to refinance their underwater, high-interest mortgages.

Making sense of the story

• Although HARP has helped more than 890,000 homeowners nationwide by reducing their monthly mortgage payments, there are still millions of homeowners who are too far underwater to participate.
• Under the new rules, homeowners who owe more than 125 percent of the market value of their homes will be allowed to refinance into new loans.
• The program also streamlines the refinancing process for homeowners who are current on their mortgage payments and reduces or removes fees that previously hindered them from refinancing.
• Fannie Mae and Freddie Mac also will reduce the fees they charged in the past to enable borrowers to better afford the new loans.  Among the fees that will be reduced or eliminated are those for appraisals, title insurance, and closing costs.
• Fees also will be waived for some underwater borrowers who are refinancing into 20-year or shorter-term loans.
• HARP is only open to borrowers who are current on their payments for the past six months with no more than one missed payment in the past 12 months.  The loans must have been originally issued before May 31, 2009, and purchased by Fannie Mae or Freddie Mac.

Read the full story