HARP Refinances Declining

As the end date for the HARP program draws near, it appears the program has done its job. Total refinances stand at 3,418,854, according to the Federal Housing Finance Agency (FHFA). Although these types of refinances continue on their steady decline, they still helped 18,310 borrowers refinance their mortgages through June this year. According to the FHFA, more than 323,000 borrowers still qualify for the program.

The HARP program was introduced in early 2009 in order to help borrowers who were underwater on their mortgages. The program allows these borrowers to refinance into a historically low interest rate or take advantage of other refinancing benefits. FHFA has been on the forefront of attempting to reach eligible borrowers, hosting events and webinars to encourage those who may qualify to take advantage of the program before it expires.

With the end of HARP imminent, FHFA has released details of another program that will fill its place for high LTV borrowers. The new streamlined refinance offering will be available in October 2017 and carries the following eligibility:

1. No missed mortgage payments for the previous six months.
2. No more than one missed payment in the previous twelve months.
3. Must receive some kind of benefit from the refinance, such as lower monthly payments.

Similar to HARP, no minimum credit score, maximum DTI or LTV, or appraisal is required. Unlike HARP, borrowers will be able to utilize the program more than once. Borrowers who currently have HARP loans are not eligible unless they refinance using a traditional product.

Since the new offering will not be available until October 2017, HARP has been extended through the end of September 2017 to bridge the gap.