The Federal Housing Finance Agency [1] (FHFA) released a report on refinance volumes for November 2017, on Wednesday. The report [2] indicated that total refinance volume increased in November as mortgage rates in October 2017 remained below the levels observed at the beginning of the year. Mortgage rates increased in November with the average interest rate on a 30-year fixed mortgage rising to 3.92 percent from 3.90 percent in October, the report said.
More than 2,000 refinances were completed through FHFA’s Home Affordable Refinance Program (HARP) in November, bringing total refinances through HARP since its inception in 2009 to more than three million, the report indicated. The loans refinanced in November represented 1 percent of total refinance volume during the month.
The report indicated that more than two million loans were refinanced through HARP for primary residences from the start of the program to November 2017. Additionally, 110,498 were for second homes and 461,945 were for investment properties.
The FHFA report also indicated that in November, 5 percent of the loans refinanced through HARP had a loan-to-value ratio that was greater than 125 percent. Year to date through November 2017, borrowers with loan-to-value ratios greater than 105 percent accounted for 19 percent of the volume for HARP loans. The proportion of HARP refinances for underwater borrowers (with LTV greater than 105 percent) refinancing to shorter term mortgages accounted for 26 percent.
The report noted that borrowers who refinanced through HARP had a lower delinquency rate compared with borrowers eligible for HARP who did not refinance through the program.
In terms of states, year to date through November 2017, HARP refinances represented 5 percent or more of total refinances in Nevada and Florida, representing more than double the 2 percent of total refinances nationwide over the same period. Underwater borrowers accounted for a large portion of HARP refinances in a number of states. The report indicated that year to date through November 2017, underwater borrowers represented 27 percent or more of HARP volume in Nevada and Florida.