Changes made to the Home Affordable Refinance Program could open the platform up to nearly double the number of homeowners eligible per previous requirements.
A study from San Diego-based DataQuick found an additional 6.7 million households may qualify under HARP 2.0, according to new loan-to-value ratio requirements. Those changes remove a 125% LTV upper limit, altering it to include borrowers with 80% or more LTV on their homes.
In total, DataQuick said 13.8 million mortgages meet HARP requirements based on LTV ratios, with the 6.7 million accounting for loans with a 125% LTV or higher.
That near doubling mirrors initial estimates for the actual completion of program refinances from the Federal Housing Finance Agency. The regulator of Fannie Mae and Freddie Mac said in October the then-900,000 refinances "may roughly double or more" by the end of 2013, HARP's expiration date, but warned such estimates are "inherently uncertain."
Program refinances totaled nearly 1 million in the latest FHFA data, and the agency said effects of HARP 2.0 could start to surface in February.
Initially, the FHFA estimated HARP would reach 4 million to 5 million homeowners.
The DataQuick numbers do not account for whether homeowners meet HARP conditions on loan delinquency, which preclude anyone who missed a mortgage payment in the previous six months or more than one in twelve months. That excludes the 4.1 million borrowers at least 30 days past due on their mortgage, according to Lender Processing Services (LPS).
Randy Wussler, who headed the project for DataQuick, said delinquencies will limit the number of eligible borrowers, but the company does not have a solid estimate. TransUnion will provide credit information for DataQuick, but only on an individual-loan basis for clients.
DataQuick launched its study shortly after the FHFA announced the HARP changes in October.
"We expected the number to be in the millions," said Wussler, also vice president of product management and marketing for DataQuick. "It didn't surprise us when we found this number."
DataQuick compiled the results from its 120-million-mortgage database, which Wussler estimates represents between 80% and 85% of the nation's mortgages. He said they limited the study's results to only Fannie- or Freddie-owned loans, per HARP requirements.
About 11 million homeowners are underwater, or owe more than their house is worth, according to CoreLogic (CLGX).