Total refinances at the government-sponsored enterprises or GSEs fell to 418,004, down nearly 10% from 463,587 in April. Refinances via the government's Home Affordable Refinance Program (HARP), which provides relief to GSE borrowers who are underwater on their mortgage, fell more than 20% to about 85,000.
HARP represented about 20% of the total refinance volume in May. Nearly 2.7 million homes have been refinanced via HARP since its inception in 2009.
Refinancing volumes have fallen sharply across the major banks in recent months amid a rise in mortgage rates that has reduced the potential economic benefit from refinancing.In the last couple of years, higher-than-normal refinancing fees have helped bolster mortgage banking performance among the country's largest banks. Profit are receding as interest rates rise. Still origination volumes were better-than-expected at many banks. The Mortgage Bankers Association on Thursday raised its outlook for mortgage originations in the second half of the year to $606 billion from $527 billion, though this is still considerably lower than $976 billion in originations in the first half of the year. -- Written by Shanthi Bharatwaj in New York. >Contact by Email. Follow @shavenk