The Federal Housing Finance Agency (FHFA) director, Mel Watt recently attended a town hall meeting in Chicago to discuss the future of Home Affordable Refinance Program (HARP) and Home Affordable Modification Program (HAMP). Watt has additionally made future plans to hold similar events in Atlanta, Detroit and Miami.

The Status of HARP

Considering that FHFA has made the claim that there are currently an estimated 650,000 HARP-eligible borrowers across the country that would benefit from the program, you would think that a lot more borrowers would have already received assistance. Many more believe that there are far more whom need to be assisted, but just do not qualify. When he first took office this year, Watt had commented that expanding HARP’s eligibility parameters would only help a small number of borrowers.

After there was an estimation of 676,000 eligible loans that were entitled to be refinanced at the end of 2013, the FHFA created a handy map that would allow these borrowers to see an estimate of how many people are eligible in each location. The map can be viewed at this HARP source , where borrowers can also determine if they are actually eligible as well.

Just last week, we at LoanSafe reported on an Ellie Mae analysis that had found refinance volume at currently low levels, specifically for the first part of 2014 (Q1 2014). As a program that enables homeowners who are delinquent on their mortgage to refinance, HARP should in theory be getting a lot more traffic than it saw earlier this year.

FHFA found that as mortgage interest rates rose in Q1 2014, 77,000 mortgages had been refinanced through the HARP program, compared to 294,000 refinances that took place in the first quarter of 2013. Even the 115,000 refinance in Q4 2013 was a better turnout than the most recent count. The 370,000 refinanced loans that were completed in Q1 2014 were the lowest level of total refinanced recorded since 2008.

The FHFA Director’s opinion on the lack of participants whom he addressed on Tuesday, was that people might not be applying because of the suspicions of it being either a “scam,” or too “burdensome” to attempt. Treasury Secretary Jack Lew stated at the recent Chicago event,

“When you work hard, act responsibly, and play by the rules, you should not have to live in fear that you are going to lose your home.”

Despite this recent downfall, Watt reminded us at his conference, that the HARP program has been one of the most successful homeowner assistance programs that have helped us come out of the fires of the foreclosure crisis.

While HARP has endured a few more fumbles since its beginning, the program is far from a failed one and has helped out 3.1 million borrowers to refinance since its inception in 2009. According to Mr. Watt, the HARP program is to remain active until 2015.

The Status of HAMP

This program unfortunately is still being reminded of its initial setbacks. The settlement of SunTrust Banks Inc. that was announced last week, is just one of those reminders of mortgage servicers and borrowers lack of efficient communication with paperwork years ago. SunTrust’s recent settlement was a victory of $320 million for bad HAMP program practices. Many more servicers are currently being investigated.

Recent modification traffic has been sluggish just like refinance volume. The Treasury Department announced that through the last year, there has been about only 10,000 to 15,000 new permanent modifications being produced per month. Treasury also announced that in April, 1.3 million homeowners had received permanent modification through the program.

Secretary Lew just a few weeks ago announced the extension that the HAMP program has received to redeem itself. The current extension is until 2016.

Erik Sandstrom
LoanSafe's Mortgage Expert
I'm a Senior Loan Officer and LoanSafe mortgage expert. If you need a live rate quote, or need help getting a new mortgage, please call me direct anytime at 619-379-8999.