FHFA: HARP success follows low mortgage rates, February refinance volume strong

By Gretchen Wegrich

The Federal Housing Finance Agency (FHFA) released its February 2013 Refinance Report today, revealing elevated refinance volumes as mortgage rates remained at or near historic low levels. The Home Affordable Refinance Program (HARP) played a major role; Of the more than 463,000 refinances that took place in February, 97,738 were completed through HARP, bringing the total number of HARP refinance to more than 2.3 million since the program was first created in April 2009.

February's HARP refinance volume equaled 21 percent of the total refinance volume.Of the loans refinanced under HARP in February, 22 percent has loan-to-value ratios greater than 125 percent.

HARP, which was set to expire December 31 of this year, was recently extended by FHFA for an additional two years. A nationwide campaign is planned to educate and encourage homeowners to learn about HARP eligibility requirements.

Year-to-date figures through February, borrowers with LTV ratios greater than 105 percent made up 45 percent of HARP loans. Meanwhile, 18 percent of refinances for underwater borrowers were for 15- and 20-year mortgages, implying that homeowners are attempting to build equity faster.

In Nevada, Arizona and Florida, the three states hardest hit by the mortgage crisis, underwater borrowers represented 65 percent or more of HARP volumes.

By state, California borrowers received 329,707 HARP loans, Florida 200,332, Illinois 158,822, Michigan 158,462 and Arizona 117,149.

Gretchen Wegrich

Gretchen Wegrich is an editor at Lender411. She specializes in mortgage basics, personal finance and green living. She graduated with a bachelor's degree in writing from University of California, San Diego and previously worked at the Santa Cruz Sentinel. Contact her at gretchen@lender411com.