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» VISIT US ONLINE @ DSNEWS.COM 59 DS News Government Progress Report (Program) DS News Housing Score B- REGULATION AND OVERSIGHT Overseen by the Federal Housing Finance Agency MISSION » HARP was launched in 2009 as part of the Obama Administration's Making Home Affordable program. The original plan was structured to help underwa- ter, but current borrowers whose mortgages were backed by Fannie Mae and Freddie Mac refinance for rates as low as 2 percent. The administration expected to provide relief for 4 million struggling homeowners. » Unlike the Home Affordable Modification Program (HAMP), which assists homeowners in danger of foreclosure, this program only benefits homeowners whose mortgage payments are current, but who have been unable to refinance due to declining home values. SUCCESSES » Because HARP proved to be confusing to some borrowers, at the beginning of 2010, only 380,000 had signed up, prompting officials to create HARP 2.0 in 2011. This version of HARP eliminated the original version's 125-percent loan-to-value limitation and allowed relief for existing mortgages with Private Mortgage Insurance and for homeowners with less than 20 percent equity in their homes. Originally, HARP was scheduled to end in June 2010, but has been extended until December 31, 2015. » The 2.0 revision generated an immediate flood of applications. During the following months, FHFA announced that more than 3.1 million borrowers had signed up for HARP. » Presently, although HARP is still drawing some inter- est, enrollment has cooled. The program accounted for only 85,000 refinancing applications last October and November, down from 300,000 modifications per quarter leading up to Q3 2013. According to FHFA, fewer than 30,000 HARP 2.0 mortgages closed in January 2014. » From the beginning of the program in April 2009 through February 2014, a total of 3,114,897 mortgag- es have been refinanced through HARP. 1,837,390 are Fannie Mae loans and 1,277,507 are Freddie Mac loans. HARP refinanced loans account for 16.2 per- cent of the GSEs' 19,137,997 total refinanced loans completed since April 2009. OPPORTUNITIES/ISSUES » HARP is only available to homeowners with Fannie Mae or Freddie Mac mortgages. » Some people complain that closing costs are high for HARP refinancing plans. » Homeowners whose mortgages are guaranteed by Private Mortgage Insurance sometimes encounter difficulty in refinancing with their original lender. » Although HARP 2.0 allows homeowners with PMI to apply through the Making Home Affordable Refinance Program, many homeowners have faced difficulty in refinancing with their original lender. » HARP requires the new loan to provide the same level of mortgage insurance coverage as the original loan. This can be difficult and time-consuming, espe- cially in the case of lender-paid private mortgage insurance (LPMI). As a result, many lenders are reluctant to refinance a PMI mortgage. » Fortunately, HARP 2.0 enables homeowners to go to any lender to refinance, so there are other options if the original bank is unwilling to consider a HARP refinance. » A major criticism of this program is the length of time it takes to complete the details of refinancing. People tell tales of mistakes, lost documents, incom- petent processors, and delay after delay. » Some banks only offer HARP refinancing to their present customers. Many say the lack of competition among banks has led to higher prices. It varies by lender, but HARP borrowers could pay more on their interest rate than with conventional refinancing. » Finding a lender willing to offer a HARP refinance with no fees isn't easy, and most of the time the lend- er will compensate the waived upfront fee by charg- ing a slightly higher interest rate. They may also add closing costs to the total balance of the refinanced loan, which is permitted in HARP. However, that may affect the borrower's eligibility for the program, as it can change the loan-to-value ratio. 76,930 refinances completed through HARP in Q1 2014 Refinances through HARP made up 21 percent of the total refinance volume 3.1 million total refinances through HARP 2.6 million loans on a Primary Residence have utilized HARP 12 percent of HARP loans had a loan-to-value ratio great than 125 percent Home Affordable Refinance Program (HARP) | CORPORATE HEADQUARTERS: Washington, D.C. 76,930 21% 3.1 MILLION 2.6 MILLION 12% through the first quarter of 2014

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