A new analysis by the Federal Housing Finance Agency shows that many borrowers remain who could save as much as $3,000 a year through the Home Affordable Refinancing Program, which allows homeowners with mortgages backed by the two government-owned companies to cut their monthly payments by obtaining a lower interest rate.
“We know that there are hundreds of thousands of borrowers who can still benefit from HARP and are essentially leaving money on the table by not taking advantage of the program,” FHFA Director Melvin L. Watt said in a statement. Watt will lead a July 8 outreach event in Chicago, where FHFA estimates about 36,000 mortgage holders could still benefit from HARP.
To qualify for a HARP loan, borrowers must have mortgages originated before June 2009 that are backed by either Fannie Mae (FNMA) or Freddie Mac and have less than 20 percent equity in their homes. The program ends in December 2015.
The program has reached 3.1 million borrowers since it began in 2009. Refinances through the program doubled in 2012 after officials extended it to borrowers whose mortgages were more than 25 percent higher than the value of their properties.
The effort to raise awareness of HARP comes as refinancing is down 56 percent from a year ago, according to data from the Mortgage Bankers Association. The average interest rate on 30-year fixed-rate mortgages has ranged between 4 and 4.5 percent since June of last year, up from rates below 4 percent, sapping the refinancing boom.
To contact the reporter on this story: Clea Benson in Washington at email@example.com