Home refinancings through HARP up 30% in fourth quarter
The number of loan refinancings processed through the government's Home Affordable Refinance Program grew by 30% in the fourth quarter, according to the Federal Housing Finance Agency. While refinancings soared in the fourth quarter, the number of completed loan modifications fell 18%, making it the second consecutive quarterly drop. Of the loans modified in 4Q, nearly half had their monthly payments reduced by at least 30%. The FHFA said fiscal 2010 ended with nearly a million foreclosure prevention actions deployed to save distressed Fannie Mae and Freddie Mac loans throughout the year. That compares to 431,000 prevention actions filed in 2009, an increase of more than 50%. Since Fannie and Freddie were placed into conservatorship in 2008, 1.4 million foreclosure prevention actions have been enacted to safeguard GSE-backed loans. HARP has sharp critics despite recent successes. Bank of America-Merrill Lynch (BAC) analysts recently said that in HARP's second year "it would be fair to say that the program has not been as successful as originally anticipated." The Obama administration launched the program two years ago so borrowers could refinance out of negative equity situations into lower rate mortgages. The program is set to expire in June. The Mortgage Bankers Association wrote a letter to the FHFA in February asking for an extension to the program. Write to Kerri Panchuk.