The Home Affordable Refinance Program (HARP) continues its torrid pace of closing.
Nearly 100,000 HARP 2.0 loans closed in March 2013, putting the refinance program for homeowners with lost equity on pace to reach 1.17 million U.S. households in 2013 -- a record for the program often called the "Obama Refi".
Not surprisingly, HARP activity remains concentrated by geography.
The Home Affordable Refinance Program is a 4-year old refinance program, first launched in 2009 as part of that year's economic stimulus program.
HARP's main feature is that it "ignores" a homeowner's loan-to-value, granting access to "prime" mortgage rates which would otherwise be unattainable. It also waives private mortgage insurance (PMI) requirements beyond a homeowner's current PMI obligation.
This means that if a HARP homeowner's current mortgage does not require PMI, lenders will not add a new PMI policy as part of the HARP refinance process. Similarly, if a homeowner currently pays PMI as part of his mortgage, witha HARP refinance, the loan's PMI coverage rate may not be increased.
Lenders are getting better at underwriting HARP loans and approving them. As a result, the pace at which refinances close is quickening.
The Home Affordable Refinance Program is a specifically geared at homeowners whose homes have lost equity since the date of purchase. It's no surprise, therefore, that states in which home values fell the farthest last decade are the ones which tend to top HARP refinance rankings.
In March 2013, Nevada was the top state for the Home Affordable Refinance Program -- more than three-fifths percent of Nevada refinance were tied to the HARP mortgage program. HARP 2.0 accounted for more than half of all refinances in Florida, too.
These are large percentages -- even as compared to the other states which high proportions of HARP loans to "regular" ones.
The top 10 states for HARP 2.0 refinances in March 2013 were :
Ohio barely missed the list, just 0.2 percentage points behind Oregon. And, not coincidentally, you'll notice that these same states rank high with respect to "lost home equity" between 2006-2011.
HARP mortgages are most common where home equity has been depleted.
The Home Affordable Refinance Program is written to make loan approvals as simple as reasonable. Guidelines are purposefully "loose" to help the program reach homeowners in need. There's also talk of a HARP 3.0 program coming soon.
HARP 3.0 would make the Home Affordable Refinance Program available to even more U.S. households.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
Barry L. Systems Analyst
The Mortgage Reports is an excellent resource. I depend on the Mortgage Reports for the most up-to-date information regarding shifts in government policy and mortgage rate information in general.
Jerolyn C. CPA
The Mortgage Reports isn't just basic mortgage rate information -- it's analysis on rate changes and trends, and updates on the laws in lending. Subscribing to the site's daily updates is worthwhile.
Dick B. Director of Special Lending
I read The Mortgage Reports because it delivers timely, up-to-the-minute mortgage news. Keep up the good work.
2017 Conforming, FHA, & VA Loan Limits
Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)