HARP Refinance Program Reaches 2 Million Milestone

By Stevie Duffin Updated on 2/19/2013

By Daniel Duffield

According to a news release from the Federal Housing Finance Agency (FHFA) detailing the November 2012 Refinance Report, the Home Affordable Refinance Program (HARP) has reached a new milestone, reaching 2 million refinances issued. During November, roughly 130,000 homeowners took advantage of this unique refinance program, making this month the second highest in terms of HARP refinances for 2012. From January to November, approximately 1 million mortgages were refinanced using the HARP program, which comprises more than the number of HARP refinances for any single year since the establishment of the program. According to FHFA analysts, the high amount of mortgages being refinanced through HARP may be attributable to the historically low interest rates of this time and the improvements made to the HARP program that took effect in 2012.

What is HARP?

The Home Affordable Refinance Program was created in 2009 in order to provide mortgage relief for borrowers who obtained mortgages immediately prior to the mortgage market crisis and burst of the U.S. housing bubble. HARP requirements differ from standard refinance requirements, primarily in that they do not enforce a maximum loan-to-value ratio (LTV). As such, underwater borrowers, or borrowers who owe more than the worth of their property, can refinance through HARP 2.0 in order to alter their mortgage terms and to acquire the currently low mortgage rates.

Additional November 2012 HARP Statistics

• During the month of November, HARP refinances comprised 23% of all mortgage refinances.
• In November, 46% of mortgage refinanced through the program had HARP loan-to-value ratios exceeding 105%, with 24% having LTVs exceeding 125%.
• In Nevada, HARP refinances constituted 68% of all refinance loans issued in November 2012, which is nearly triple 23% national average in terms of HARP refinances of all refinance loans issued. In Florida, HARP refinances represented 56% of total refinances, more than double the percent of total refinances nationwide.
• 17% of the HARP refinances in November were for mortgages with shorter terms, such as 15-year and 20-year, than standard 30-year mortgages, which build equity slower.
• A statistics adjustment was implemented in order to provide additional consistency between Fannie Mae and Freddie Mac calculations, which included an additional 160,000 mortgages to the total HARP volume recorded.