HARP ® 2.0 Used By More Homeowners In First Five Months Of 2012 Than In All Of 2011
Huffington Post, Copyright: 2012
WASHINGTON, July 16 (Reuters) - The number of underwater U.S. homeowners refinancing through an Obama administration anti-foreclosure program has picked up sharply since its expansion late last year, according to figures a housing regulator released on Monday.
More than 78,000 home loans were refinanced using the expanded Home Affordable Refinance Program ®, nicknamed HARP ® 2.0, during the first five months of 2012, more than for all of 2011, the Federal Housing Finance Agency said.
The Obama administration and the housing regulator FHFA revamped the HARP ® program in October to allow homeowners with loans backed by Fannie Mae and Freddie Mac and who are current on their mortgages to refinance no matter how much their home value has dropped below what they owe.
"These numbers show HARP ® 2.0 is accomplishing the goals set forth -- to provide relief to borrowers who might otherwise be unable to refinance due to house price declines," FHFA Acting Director Edward DeMarco said in a statement.
The FHFA, which oversees Fannie Mae and Freddie Mac, said HARP ® refinancings accounted for 20 percent of the total number of refinancing loans in May, the highest since the program was implemented three years ago.
Homeowners who owe more than 125 percent of their properties' value had been shut out from refinancing until the changes to the HARP ® program were unveiled last year.
As of May, more than 1.3 million borrowers had been helped by the foreclosure-prevention program. The White House has avoided predicting how many homeowners would benefit from the revamped program, but the FHFA had estimated an additional 1 million people would qualify for refinancing.
One of the main reasons for the surge this year has been the removal of loan-to-value ratios on eligible loans. The reworked program also waived certain fees and gave lenders a break from the warranties they sign when they originate certain loans.
Government-owned Fannie Mae and Freddie Mac, which buy loans from lenders and repackage them as securities for investors, often make lenders buy back loans for perceived defects. The two companies, which have drawn nearly $190 billion in taxpayer aid to stay afloat, have used those buyback demands to dampen losses.
The U.S. Senate is considering a bill to further expand HARP ®, which is aimed at reaching as many as 17.5 million more borrowers. While lawmakers continue to bat about ideas for speeding a recovery in the lackluster U.S. housing market, little action is expected this year in the face of presidential and congressional elections.