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HARP mortgage refinancing up 20% in September

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Lenders and servicers refinanced nearly 35,000 Fannie Mae and Freddie Mac mortgages through the Home Affordable Refinance Program in September, a 20% monthly increase just before major guideline changes were announced. The Federal Housing Finance Agency launched HARP in March 2009 to allow borrowers with mortgages that have loan-to-value ratios between 80% and 125% to refinance their loans if they are held by the government-sponsored enterprises. Lenders and servicers refinanced nearly 35,000 Fannie Mae and Freddie Mac mortgages through the Home Affordable Refinance Program in September, a 20% monthly increase just before major guideline changes were announced. The Federal Housing Finance Agency launched HARP in March 2009 to allow borrowers with mortgages that have loan-to-value ratios between 80% and 125% to refinance their loans if they are held by the government-sponsored enterprises. Participating lenders and servicers have refinanced 928,600 GSE loans through HARP as of the end of the third quarter, the FHFA said Tuesday. It is an 11% increase from the previous quarter. Nearly 11 million borrowers owe more on their mortgage than their home is worth, trapping them out of refinancing at interest rates hovering around 4%. "Monthly HARP volume grew in the third quarter as interest rates decreased to new historic lows," the FHFA said. In October, the FHFA eliminated the LTV cap, upfront fees charged to borrowers and representation and warranty risk in order to provide more assistance to underwater borrowers. Fannie and Freddie released specific guidelines in November. Before the changes, borrowers who owed more on their mortgage than their home was worth made up a sliver of HARP totals. In September, 83% of HARP refinancings — nearly 29,000 loans — went to borrowers between 80% and 105% LTV, compared to 5,700 between 105% and 125% LTV, according to FHFA data. The majority of Fannie and Freddie refis go through other programs outside of HARP. In all, lenders refinanced 263,780 GSE loans. Servicers completed more than 140,000 foreclosure prevention actions for the GSEs, including 83,500 mortgage modifications, in the third quarter. Short sales and deeds-in-lieu of foreclosure added another 30,800 for a total of more than 171,000 foreclosures prevented during the period. Lenders started foreclosures on more than 224,000 properties, down nearly 11% from the previous quarter, according to the FHFA. Write to Jon Prior. Follow him on Twitter @JonAPrior.

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