HARP hits 3 million loans refinanced milestone

More than 3 million homeowners have refinanced their mortgage through the Home Affordable Refinance Program (HARP) according to a recent report from the Federal Housing Finance Agency (FHFA).

Introduced in April 2009, HARP was intended to help borrowers who owed more than their home was worthrefinance into a loan with a lower interest rate or more stable payments.

In a statement, FHFA Director Mel Watt characterized 3 million HARP refinances as “an important accomplishment” that “represents real help” for borrowers affected by the mortgage crisis.

“We are continuing our efforts to make sure that those who can take advantage of this program have the information they need to do so,” Watt added.

HARP enhancements

The HARP program was expanded in November 2011 to allow more borrowers to qualify. Specific “enhancements” included a higher loan-to-value ratio and greater use of certain automated valuation models in lieu of an appraisal.

These changes dramatically increased the volume of HARP refinances in 2012 and, after the deadline was extended in 2013, the FHFA said.

Fannie Mae and Freddie Mac have now completed more than 18 million refinances, including the 3 million HARPs, since they were placed in federal government conservatorship, FHFA said.

More than 3 million loan modifications, short sales and other foreclosure prevention actions also have been completed, according to the FHFA report.

HARP requirements

Here’s a summary of basic HARP eligibility requirements:

• Borrowers must be current on their mortgage payments with no payments more than 30 days late in the last six months and no more than one late payment in the last 12 months.
• Eligible property types are primary residence, one-unit second home and one-to-four-unit rental property.
• The borrower’s loan must be owned or guaranteed by Fannie Mae or Freddie Mac and have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
• The current loan-to-value (LTV) ratio must be at least 80 percent. There is no maximum LTV limit for a new fixed-rate mortgage. The maximum LTV for a new adjustable-rate mortgage is 105 percent.
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