Approximately 3.4 million homeowners have received mortgage modifications through the government’s Home Affordable Refinance Program since the program’s inception in 2009. Now that many of those homeowners have built up sufficient equity and mortgage rates are low, however, many HARP refinancers are leaving the program behind in favor of more conventional mortgage modifications, according to Freddie Mac’s January 2016 Insights & Outlook report released on Friday.
As part of a trend Freddie Mac has dubbed unHARPing, an estimated 10 percent of the 3 point 4 million HARP borrowers have refinanced into a non-HARP loan. Many of the borrowers who refinanced through HARP from 2009 to 2012 likely have a mortgage rate of higher than 5 percent, and many of them have taken advantage of the low mortgage rates. Since there are more than 2 million current active HARP loans in the United States, there remains significant potential for those borrowers to refinance using a conventional loan.
Economic growth nearly ground to a halt in the Bureau of Economic Analysis advance estimate for the fourth quarter of 2015, coming in at an annualized rate of zero point 7 percent in the data released on Friday. This estimate follows GDP growth of 2 point 0 percent in the third quarter and 3 point 9 percent in the second quarter. According to the Bureau, deceleration in real GDP in the fourth quarter primarily reflected a deceleration in PCE and downturns in nonresidential fixed investment.