The Home Affordable Refinance Program (HARP) has been extended through Dec. 31, 2018 in conjunction with updates to the High LTV Streamlined Refinance program, the Federal Housing Finance Agency (FHFA) announced Thursday. The program, which offers non-delinquent mortgage borrowers with high loan-to-value ratios (LTVs) the means to obtain a Fannie Mae- or Freddie Mac-backed refinance, will become available for loans originated on or after Oct. 1, 2017. According to a release from the agency:
The eligibility date was necessary to preserve the objectives of the Enterprises’ credit risk transfer (CRT) program under which the Enterprises have transferred a portion of risk on $1.6 trillion of unpaid principal balance with a combined risk in force of nearly $54.2 billion as of March 2017. The Enterprises will modify the structure of future CRT transactions to accommodate the High LTV Streamlined Refinance program by allowing the newly refinanced loans to return to the reference pools in place of loans that prepaid. This will help preserve credit loss protection on the loans without unwinding the protection paid for through CRT transactions.
The changes made to the High LTV Streamlined Refinance program appropriately balance continuing to offer assistance to underwater borrowers with protecting taxpayers.
“Fannie Mae is pleased to work with the Federal Housing Finance Agency (FHFA) and Freddie Mac to make options available for borrowers to refinance into lower rate mortgages,” said Fannie Mae in a statement. “The high loan-to-value (LTV) refinance option will provide refinance opportunities to borrowers with existing Fannie Mae mortgages who are making their mortgage payments on time, but whose LTV ratio for a new mortgage exceeds the maximum allowed for standard refinance products or is above 95 percent LTV. At the direction of FHFA, Fannie Mae will continue to offer the Home Affordable Refinance Program (HARP) through Dec. 31, 2018 to ensure that eligible borrowers can take advantage of the existing HARP program. We will continue to work with any eligible borrowers who may be able to benefit from these offerings and refinance into more affordable mortgages.”
“Freddie Mac is pleased to extend the Home Affordable Refinance Program (HARP) through Dec. 31, 2018, in accordance with [the] announcement by the Federal Housing Finance Agency (FHFA),” said Yvette W. Gilmore, vice president of Servicing Management for Single-Family Business at Freddie Mac, in a statement. “To continue making home possible for American families, we will implement the previously announced Freddie Mac Enhanced Relief RefinanceSM program in late 2018 for loans originated on or after Oct. 1, 2017. It carries through the most successful HARP features, including streamlined documentation requirements, to allow eligible borrowers with mortgages that have high loan-to-value (LTV) ratios to refinance into more affordable and sustainable mortgages. Borrowers can expect to benefit from Enhanced Relief Refinance through lower monthly payments, lower interest rates or shorter amortization terms, or they can move from adjustable-rate mortgages to fixed-rate mortgages.”
HARP has allowed more than 3.4 million homeowners refinances, with over 143,000 still having the potential to utilize the program.
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