In the wake of the 2008 housing crisis, many American homeowners found themselves unable to refinance because of the significant drops in home prices. To offer support, the federal government stepped in to help underwater and near-underwater homeowners refinance their mortgages.
This support program was named HARP® or the Home Affordable Refinance Program, established by the Federal Housing Finance Agency(FHFA) and the Treasury department in March, 2009.
Since HARP®’s inception, the program has helped over 3 million Americans refinance their mortgages despite having high LTVs. Now, even more homeowners can continue to benefit from the program as the Federal Housing Finance Agency announces HARP®’s extension for one more year.
Not the first
This is not the first time that the agency decided to extend the HARP® deadline. The program has already been extended thrice and was set to end September of this year.
Why the change? The FHFA said the decision was made to bid more time for the agency to make changes to a new refinance program that would replace HARP®, which it is projected to launch October of this year.
HARP® throughout the years
– The FHFA authorized Fannie Mae and Freddie Mac to expand HARP®’s allowable LTV limit to 125 percent from the original 105 percent.
– The agency reported an increase in refinancing volume for both Freddie Mac and Fannie Mae, with 2.9 million loans refinanced
– Refi volume dropped in September
2010– The Federal Housing Finance Agency’s Acting Director Ed DeMarco announced HARP®’s extension to June 30, 2011. The program was set to expire by June 10 of that year.
- The program is again extended for another year with the new deadline set to June 30, 2012.
- On October of that year, the agency announced key changes to the program in order to reach more borrowers. These significant changes included:
- Eliminating risk-based fees charged to borrowers who refinance into mortgages with shorter terms while lowering fees for other borrowers
- Removing the set 125 percent LTV limit for FRMs backed by Fannie Mae and Freddie Mac
- Waiving warranties and representations that lenders use to originate Freddie Mac or Fannie Mae mortgages
- Eliminating the need for new appraisals in the availability of AVM estimates provided by the enterprises
- Extending the HARP® deadline toDec. 31, 2013 if the loan was originally sold to the Enterprises on or before May 31, 2009
2012– overall reports on refi surges caused by the program and its latest changes
- Continued reports on soaring refi volumes
- The agency launched a National Education Campaign that aimed to reach homeowners who are eligible to refinance under the HARP®
- New reports on refi volumes dipping
- Outreach efforts were launched due to the declining volume of refinances
- HARP® refis now reached 3.2 million
- Outreach efforts continue
- The agency announced another year of extension for the program.
- HARP® refinances now at 3.4 million
- Deadline again extended to September 30, 2017
And just Thursday last week, August 17, the agency announced another round of extension due its preparation for a new streamlined refinance program targeting borrowers with high Loan-to-Value ratios.
Certain changes needed to be made to the program, making it necessary for the crisis-era program to continue.
“To ensure that high LTV borrowers who are eligible for HARP continue to have a refinance option, FHFA is also directing the Enterprises to extend HARP through Dec. 31, 2018,” the FHFA says.Click to See the Latest Mortgage Rates»