As of the end of the first quarter, more than 3.4 million mortgages had been refinanced through the Home Affordable Refinance Program (HARP), the Federal Housing Finance Agency (FHFA) reports.
The program, which was launched in 2009 and is slated to sunset on Dec. 31, allows borrowers who are current on their mortgage payments – but have little or no equity in their homes – to take advantage of low interest rates and other refinancing benefits.
Roughly 19,000 homeowners refinanced their mortgages through HARP during the first quarter. Of these borrowers, about 22% had loan-to-value ratios greater than 105%.
In the first quarter, about 25% of HARP refinances were for 15- and 20-year mortgages, which build equity faster than traditional 30-year mortgages.
Although it is by no means a flop, participation in the program didn’t quite live up to the federal government’s expectations – in part because the economy improved and home values increased. Still, the FHFA is continuing to promote the program in the hopes of reaching some 325,000 U.S. borrowers who are still eligible and who have a financial incentive to refinance.
These so-called “in-the-money” borrowers meet the basic HARP eligibility requirements; have a remaining balance of $50,000 or more on their mortgages; have a remaining term on their loans of greater than 10 years; and have mortgage interest rates that are at least 1.5% higher than current market rates. These borrowers could save, on average, $2,400 per year by refinancing their mortgages through HARP, the FHFA says in a release.
The FHFA will hold its final HARP outreach webinar on May 24. FHFA officials will be joined by representatives from Freddie Mac, Fannie Mae, the U.S. Department of the Treasury, Quicken Loans and Neighborworks America.
To register for the webinar, click here.