The Federal Housing and Finance Agency released their April 2017 Refinance Report Thursday showing falling total refinance volume as mortgage rates in March remained higher than the lows observed in 2016. Overall, mortgage rates decreased in April with the average 30-year fixed being 4.05 percent, down from 4.20 percent in March.
HARP, which was established in 2009 to help those who couldn’t refinance due to decline in home value, was designed to give borrowers a chance to refinance by permitting the transfer of existing mortgage insurance to their newly refinanced loan, or allowing those without mortgage insurance on their previous loan to refinance without obtaining new coverage.
HARP had 3,493 refinances in April—which brings the total refinances from the inception of the program to 3,464,589. This represented 3 percent of total refinance volume. 6 percent of the loans refinanced through HARP had a loan-to-value ratio greater than 125 percent.
According to FHFA, borrowers with loan-to-value ratios greater than 105 percent accounted for 19 percent of the volume of HARP loans year-to-date through April 2017. Twenty-five percent of HARP refinances for underwater borrowers year-to-date were for shorter term 15- and 20-year mortgages, which build equity faster than traditional 30-year mortgages. Refinances through HARP represented 6 or more percent of total refinances in Nevada and Florida—double the 3 percent of total refinances nationwide over the same period.
Borrowers who refinanced through HARP had a lower delinquency rate compared to borrowers eligible for HARP who did not refinance through the program, according to the FHFA. Ten states in the U.S. accounted for over 60 percent of the Nation’s HARP eligible loans with a refinance incentive as of December 31, 2016. These states include Florida, Illinois, Michigan, Ohio, Georgia, Puerto Rico, Pennsylvania, New Jersey, New York, and Alabama. The national total of HARP eligible loans with refinance incentive was 137,594.