This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Home-Refinance Plan by Government Tops 2 Million

Stocks in this article: FNMA FMCC XHB XLF

NEW YORK ( TheStreet) -- The government's Home Affordable Refinance Program (HARP) has helped a little over 2 million borrowers refinance their mortgages at lower rates, the Federal Housing Finance Agency said Tuesday.

Between January and November 2012, nearly 1 million borrowers refinanced their loans through the program, more than in any single year since the program's inception, on the back of record low interest rates and changes that made it easier for underwater borrowers to access refinancing.

HARP was established in 2009 to help borrowers with mortgages backed by Fannie Mae and Freddie Mac an opportunity to refinance their loans. But the program failed to help many borrowers who owed significantly more than their homes were worth.

In October 2011, the program was expanded, allowing even deeply underwater borrowers to refinance by removing a 125% cap on loan-to-value limits. Harp 2.0, as it's dubbed, also eliminated certain risk-based fees for those who refinanced into shorter-term loans and waived representation and warranties that lenders commit to in making loans owned or guaranteed by the agencies.

The enhanced program was far more successful. From January through November 2012, 998,294 refinances were completed through HARP.

In November alone, nearly 130,000 borrowers refinanced their mortgages, representing 23% of total monthly refinance volume. Notably underwater borrowers appear to be taking the most advantage of HARP.

About a quarter of the November refinances included mortgages with a loan-to-value greater than 125%, while about 46% had a loan-to-value ratio of more than 105%.

In November, HARP refinances represented 68% of those in Nevada and more than 56% of those in Arizona, where most borrowers still owe more than their homes are worth.

Underwater borrowers are refinancing into shorter term 15- and 20-year mortgages that helps them pay off their principal faster, thereby building more equity in their homes.

HARP is due to expire at the end of 2013. However, a new bill has been introduced in Congress to extend HARP by an additional year to 2014 and also ease the process further by eliminating appraisal costs, reducing upfront fees and ensuring consistent standards for all lenders. Read more on that plan here.

President Obama is also still pushing for a universal refinancing plan that would allow borrowers with non-government-backed mortgages to refinance via the Federal Housing Administration.

Analysts, however, doubt either of those plans will win approval in the Republican-controlled House.

-- Written by Shanthi Bharatwaj in New York



>To contact the writer of this article, click here: Shanthi Bharatwaj.

>To follow the writer on Twitter, go to http://twitter.com/shavenk.

>To submit a news tip, send an email to: tips@thestreet.com.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs