The Home Affordable Mortgage Refinancing Program (HARP) outperformed expectations in 2012 after enhancements to the program in late 2011 increased its availability to underwater homeowners. The Federal Housing Finance Agency (FHFA) announced today that 1,074,755 mortgages were originated through HARP in 2012, doubling the number over the life of the program which began in 2009 to 2,165,021. There were 438,228 HARP originations in 2011.
Volume in the fourth quarter of 2012 was 297,461 refinances, representing 22 percent of total refinance volume. December refinance volume fell to 76, 461 compared to 129,746 in November. The November volume had ballooned in advance of a 10 basis point guarantee fee increase that took effect starting December 1, 2012. Fannie Mae HARP originations in were 51,054 in December compared to 77,301 in November and Freddie Mac's dropped from 52,445 to 25,407.
HARP refinances since the inception of the program have been overwhelmingly on primary residences with only 69,522 of the over 2 million total covering second homes and 199,672 refinancing investment properties.
Since the enhancements to the HARP program which removed the previous 125 percent loan-to-value (LTV) cap were implemented at the beginning of 2012 there have been 228,144 mortgages originated with LTV's exceeding 125 percent or about 20 percent of the HARP loans that year. A total of 605,946 loans were originated with LTV's in the lowest range for the HARP program, 80 to 105 percent LTV.
Eighteen percent of HARP borrowers in December took advantage of the incentives offered by HARP and opted for shorter term 15 or 20 year mortgages in order to rebuild their equity more rapidly.
In December, HARP refinances represented 68 percent of total refinances in Nevada, triple the 21 percent of total refinances nationwide and in Florida they represented 58 percent of total refinances, more than double the HARP percentage nationwide.
The top five states for HARP refinances since 2009 are: California (301,327), Florida (175,686), Illinois (147,252), Michigan (144,709) and Arizona (106,387).
