Demand for the Home Affordable Refinance Program continued to trickle as mortgage rates climbed higher after June 2013, according the Federal Housing Finance Agency’s latest November Refinance Report.
The fine print and additional information of the FHFA report can he found here.
Since June, mortgage rates escalated between four to four and a half percent, with the average interest rate on the 30-year, fixed-rate mortgage reaching 4.26%.
And HARP applications felt the burden of that.
A total of 862,892 refinances were completed through HARP in 2013, compared to 1,074,777 in 2012.
Additionally, a total of 38,732 were completed in November, bringing the total number of completed applications since the programs start to 3,027,937.
“Three million HARP refinances is an important accomplishment and represents real help to families and communities still struggling as a result of the mortgage crisis,” said FHFA Director Mel Watt. “We are continuing our efforts to make sure that those who can take advantage of this program have the information they need to do so.”
Watt's ascension to the director spot is leading to market speculation he will expand HARP to cover mortgages not placed with Fannie Mae and Freddie Mac. Those talks still require a great deal more discussion as, logistically, there are issues with FHFA authority in this regard. This so-called revamp, referred to as HARP 3.0, could expand to Alt-A mortgages being refinanced into prime products.
The program was established in 2009 to assist homeowners unable to access a refinance due to a decline in their home value. HARP was originally scheduled to expire on Dec. 31, 2013 but was extended in April to expire on Dec. 31, 2015.
Meanwhile, HARP volume represented 24% of total refinance volume in November and 14% of the loans refinanced through HARP had a loan-to-value ratio greater than 125%.
Year-to-date through November 2013, borrowers with loan-to-value ratios greater than 105% accounted for 40% of the volume of HARP loans.
On a state basis, year to date through November 2013, HARP refinances represented 55% of total refinances in Nevada and 49% of the total refinances in Florida, more than double the 22% of total refinances over the same period.