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Refinance Volume Down As Rates Increase

Approximately 750,000 borrowers chose to refinance their home loans through Fannie Mae and Freddie Mac during Q4 of last year, according to the Federal Housing Finance Agency (FHFA).

In the FHFA Refinance Report for Q4 2016 released this week, the agency also found that 13,220 refinances were run through the Home Affordable Refinance Program.

Over that period, underwater borrowers with 15- and 20-year mortgages accounted for more than a quarter of refinances. The report also stated that 27 percent of HARP refinances for underwater borrowers were for shorterterm 15 and 20year mortgages, which build equity faster than traditional 30year mortgages.

Borrowers who refinanced through HARP had a lower delinquency rate compared to borrowers eligible for HARP who did not refinance through the program. The latest data shows that 10 states accounted for over 60 percent of the nation's HARP eligible loans with a refinance incentive, including California, Florida, Georgia, Illinois, Michigan, New Jersey, New York, Ohio, and Pennsylvania. Although not a state, Puerto Rico was also included in this listing.

HARP refinancing volume declined just a little between the third and fourth quarters as mortgage interest rates continue to climb.

Still, that brings the total number of refinances through HARP to roughly 3.4 million since the program was first established under the Obama administration in 2009, according to the report.

FHFA reported that close to 200,000 borrowers could still refinance their loans through HARP as of the third quarter, and save $2,400 per year on average as a result.

“The program is designed to provide these borrowers with an opportunity to refinance by permitting the transfer of existing mortgage insurance to their newly refinanced loan, or by allowing those without mortgage insurance on their previous loan to refinance without obtaining new coverage,” FHFA said in its report.





About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.

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