The FHFA will soon be launching a nationwide campaign to inform consumers of the extension and their options under the refinance program. For more on eligibility requirements, click
Fears that the boost from refinancing has largely played out weighed on the stocks, so the extension of HARP is likely to be good news. Earlier this week, FBR Capital analyst Paul Miller reiterated his bullish stance on mortgage banks, arguing that there was still some steam left from refinancing. "While many of the large servicers have refinanced a large portion of their HARP loans, smaller servicers are still playing catch-up as demand has exceeded capacity. We estimate that there are between $2T and $2.5T of mortgages that still have an economic incentive to refinance with current refi capacity standing at $1.2T to $1.3T," he wrote. Mortgage servicers were rallying sharply on the news, with shares of Walter Investment Management ( WAC) jumping 7% and Nationstar Mortgage ( NSM) climbing more than 4% in afternoon trading. "This kills the bear case" for Nationstar and Walter Investment, Sterne Agee analyst Henry Coffey said in a note. The analyst said the extension will add 40 cents per share to his 2014 earnings per share estimate for both companies. -- Written by Shanthi Bharatwaj in New York.