Federal Housing Finance Agency Federal Housing Finance Agency Refinance Report May 2012 This report contains data on refinance program activity of Fannie Mae and Freddie Mac (the Enterprises) through May 2012.
Federal Housing Finance AgencyFederal Housing Finance Agency
Refinance Report May 2012
This report contains data on refinance program activity of Fannie Mae and Freddie Mac (the Enterprises) through May 2012.
Federal Housing Finance Agency Refinance Report May 2012
Report Highlights
● Refinance volume continued to be strong in May as 30-year mortgage rates reached new record lows.
● HARP volume represented 20 percent of total refinance volume in May, the highest percentage reported since the inception of HARP. One in five refinanced loans in May was through HARP.
● The number of completed refinances for underwater borrowers in the first five months of 2012 exceeded the number of refinances completed for underwater borrowers for all of 2011.
Overview of the Home Affordable Refinance Program (HARP)
HARP Eligibility
HARP was established in 2009 to assist homeowners unable to access a refinance due to a decline in their home value. The program was originally designed to provide these borrowers with anopportunity to refinance by permitting the transfer of existing mortgage insurance to their newly refinanced loan, or by allowing those without mortgage insurance on their previous loan to refinance without obtaining new coverage.
Below are the basic HARP eligibility criteria:
● Loan must be owned or guaranteed by Fannie Mae or Freddie Mac.
● Loan must have been delivered to the GSEs on or before May 31, 2009.
● Current loan to value ratio -- LTV -- (outstanding mortgage balance/home value) must be greater than 80 percent.
● Borrower must be current on their mortgage payments at the time of the refinance.
● Payment history – borrower is allowed one late payment in the past 12 months, as long as it did not occur in the 6 months prior to the refinance.
HARP Enhancements
In the Fall of 2011, FHFA worked collaborat ively with the GSEs and other industr y participants in an effort to increase access to the program for responsible borrowers who were already eligible. The result of these e e ffforts was a series of enhancements to tthhe e program listed below:
● Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;
● Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac;
● Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie Mae and Freddie Mac;
● Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by the Enterprises; and
● Extending the end dat e for HARP until Dec. 31, 2013 for loans originally sold to the Enterprises on or before Ma y 31, 2009.
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Refinance volume continued to be strong in May as 30-year mortgage rates reached new record lows.
Mortgage Rates vs Refinance Volume
Number of Mortgages Refinanced by Fannie Mae and Freddie Mac
HGB C D E F I KJ
6.48
6.04
5.29 5.00 5.42
5.06
4.93
4.97 4.74
4.35 4.71
4.84
4.51 4.11 3.963 80300,000
400,000 500,000 600,000 700,000 800,000 900,000
1,000,000
* Mortgage rates are from the Freddie Mac Primary Mortgage Market Survey, monthly average, from the Freddie Mac website.
Freddie Mac
Average Interest Rate on a 30-Year Mortgage
4.51 4.11 3.96
3.95 3.80
0 100,000 200,000 300,000
,
A
Sep Dec Mar Jun Sep Dec Mar Jun 08 08 09 09 09 09 10 10
Sep Dec Mar Jun Sep Dec Mar May 10 10 11 11 11 11 12 12
Federal Housing Finance Agency Refinance Report May 2012
A - Highest rate in 2008 for a 30-year mortgage B - GSEs placed into conservatorship on 09/06/08 C - Fed announces MBS purchase program on 11/25/08 D - Obama Administration's Making Home Affordable
announcement 02/20/09 E - Treasury rates sharply rose and reached a 2009 high on a better
than expected June unemployment report. F - Treasury rates fell sharply after Dubai sought to delay sovereign
debt payments. G - Treasury Rates rose on optimism of a recovering U.S. economy
and a temporary lull in news of a developing debt crisis in Europe.
H - 30-year mortgage rates reached 4.17 percent in ear ly November, marking the lowest level observed since Freddie Mac began tracking rates in 1971.
I - Treasury rates fell amid ong oing concerns of a growing debt crisis in Europe.
J - Refinance volume surged in March and dipped in April, as seller-servicers completed refinancings ahead of a 10 basis point guarantee fee increase that took effect in April 1, 2012, mandated by the Temporary Payroll Tax Cut Continuation Act of 2011.
K - 30-year mortgage rates r eached new historic lows in M ay 2012.
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Federal Housing Finance Agency Refinance Report May 2012
Year-to-date through May 2012, 78,273 refinances were completed for underwater borrowers, exceeding the 2011 total of 59,991.
1Inception to Date - Since April 1, 2009
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HARP volume represented 20 percent of total refinance volume in May, the highest percentage reported since the inception of HARP. One in five refinanced loans in May was through HARP.
HARP Refi nance, Quarterl y Volum(Number of loans in thousands)
7266 50
1001018886 86 90 93
200 180180
160
140
120
100100
80
85 142
130 117
16 46 43 53 47 51
70 64 47 51 53
95 67
27 4014
40 32
47 41
50
72 66
100101
40 39 40
50
23 28
88
30
86 74
86 90 93
49 67
Freddie60 Mac
40
Fannie20 Mae
0 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q April April May
Percent 09 09 09 10 10 10 10 11 11 11 11 12 & May
2012 2012 2012
of Total 2% 8% 10% 14% 14% 11% 10% 13% 16% 14% 9% 15% 19% 18% 20% Refinances
Federal Housing Finance Agency Refinance Report May 2012
e
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Federal Housing Finance Agency Refinance Report May 2012
More underwater borrowers were able to refinance through HARP in 2012 as a result of HARP enhancements that went into effect in the first quarter.
Monthly HARP Volume by LTV
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The removal of the 125 percent LTV cap and certain risk-based fees for refinancing enabled more underwater borrowers to access refinancing through HARP. In May , borrowers with LTV greater than 105 percent accounted for 32 percent -- or almost one third -- of HARP volume, up from 15 percent in 2011. In addition, an increasing number of underwater borrowers chose shorter-term 15- and 20-year mortgages, which build equity faster than traditional 30-year mortgages.
Percentage of HARP Refinances b y Loan-to-Value Ratio
85%74% 68%
100%
26% 32%
85% 74% 68%
80%
LTV 80%-105%LTV 80%-105%60%60%
40%
20% 15%
LTV >105%*
0% 2011 Year- May
Average to- 2012 Date
May 2012 Average
* Includes HARP LTV >105%-125% and HARP LTV >125%.
Mortgage Term o f HARP Refinancesof Underwater Borrowers(LTV Greater than 105%)
100%
80%
60%60% 81% 90% 85% 81% 30-year*
40%
20%15- and 20- year
0% 19%10% 15%
2011 Year- MayAverage to- 2012
DateMay 2012Average
Federal Housing Finance Agency Refinance Report May 2012
* Includes 25-year and 40-year mortgages.
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In May 2012, HARP accounted for a substantial portion of total refinance volume in certain states. HARP refinances represented over 40 percent of total refinances in Nevada, Arizona, Michigan and Florida, compared to 20 percent of total refinances nationwide.
Underwater borrowers accounted for a significant and growing portion of HARP refinances in certain states. In Nevada and Arizona, underwater borrowers represented more than half of HARP volume, and in Florida, Idaho and California they represented more than 40 to 50 percent of HARP refinances.
Total HARP as a Percentage of TTootal Reftal Refiinancesnances
48%27%Nevada 27%Nevada 48%
Arizona 23% 42%
Idaho
Florida 17%
21%
36% 41%
Michigan 26% 44%
California 15%9%
Inception to Date
All States 11% 20% May 2012
0% 20% 40% 60%
HARP LTV >105% as a Percentage of ToTotatal HARPl HARP
59%NevadaNevada 59% Arizona 26%
56% Florida 23%
45% Idaho 19%
48% Michigan 20%
36% California 18%
42%
All States 13% 32%
Inception to Date May 2012
0% 20% 40% 60%
27%
Federal Housing Finance Agency Refinance Report May 2012
27%
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Appendix: Data Tables
Fannie Mae and Freddie Mac - Monthly Refinance Volume (# of loans)
May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12Total Refinances
Fannie Mae 103,144 118,098 108,870 120,694 169,066 183,055 233,837 264,305 221,272 211,428
329,207 176,633 230,523 Freddie Mac
65,298 67,525 59,316 76,377 94,703 111,822 124,544 112,050 130,655 123,603 162,239
90,977 110,686
Total 168,442 185,623 168,186 197,071 263,769 294,877 358,381 376,355 351,927 335,
031 491,446 267,610 341,209
Total HARP
Fannie Mae 14,019 16,222 14,441 17,011 19,599 17,766 21,210 13,824 29,2
68
24,008 41,633 26,828 39,953 Freddie Mac
11,456 12,135 12,070 11,871 15,216 15,799 15,094 9,499 26,
914
20,531 37,840 22,625 27,503
Total 25,475 28,357 26,511 28,882 34,815 33,565 36,304 23,323 56,182 44,539 79,473 49,453 67,456 HARP LTV >80% -105%
Fannie Mae 12,363 14,266 12,756 15,073 17,140 15,510 18,959 12,464 25,1
62
19,427 32,356 19,737 27,581 Freddie Mac
8,944 8,830 9,291 8,969 11,900 12,821 12,192 8,141 21,
254
15,176 25,522 14,345 18,270
Total 21,307 23,096 22,047 24,042 29,040 28,331 31,151 20,605 46,416 34,603 57,878 34,082 45,851 HARP LTV 105% 125%HARP LTV >105% -125%
Fannie Mae 1,656 1,956 1,685 1,938 2,459 2,256 2,251 1,360 4,1
06
3,828 7,813 5,577 10,378
Freddie Mac 2,512 3,305 2,779 2,902 3,316 2,978 2,902 1,358 5,
660
4,557 10,896 6,067 8,273 Total 4,168 5,261 4,464 4,840 5,775 5,234 5,153 2,718 9,766 8,385 18,709 11,644 18,651 HARP LTV >125%
Fannie Mae
753 1,464 1,514 1,994 Freddie Mac
798 1,422 2,213
960 Total 1,551 2,886 3,727 2,954 All Other Streamlined Refis
Fannie Mae 35,396 40,712 32,896 38,962 50,237 39,301 50,880 52,008 41,6
21
41,914 60,765 30,333 43,546 Freddie Mac
16,174 14,549 13,168 15,702 22,479 25,491 23,933 29,810 21,
548
19,378 25,899 13,122 19,261
51,570 55,261 46,064 54,664 72,716 64,792 74,813 81,818 63,169 61,292 86,664 43,455 62,807 Total
Federal Housing Finance Agency Refinance Report May 2012
Notes:
Initially HARP Refinance Loans were defined as Fannie Mae to Fannie Mae and Freddie Mac to Freddie Mac first-lien refinance loans with limited and no cash out that are owner-occupied with loan-to-value ratios over 80 percent up to 125 percent.
HARP Enhancements: On October 24, 2011, FHFA, Fannie Mae and Freddie Mac announced HARP changes to reach more borrowers. Effective December 1, 2011, existing Enterprise borrowers who are current on their mortgage payments can refinance and reduce their monthly mortgage payments at loan-to-value ratios above 80 percent without any maximum loan-to-value limit.
All Other Streamlined Refis are streamlined refinances that do not qualify as HARP refinances. Fannie Mae implements streamlined refinances through the Refi Plus product for manual underwriting and DU Refi Plus product for loans underwritten through Desktop Underwriter. The product is available for refinances of existing Fannie Mae loans only. Freddie Mac implements streamlined refinances through the Relief Refinance Mortgage product. Loans may be originated by any Freddie Mac approved servicer.
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Fannie Mae - Loan Count by LTV and Product (Mortgage Term)
May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12
Total Refinances
FRM 30 (incl FRM 25 & 40)
FRM 20
FRM 15
55,703
7,840
34,165
60,484
8,165
43,106
53,310
8,130
40,950
59,506
8,094
46,009
73,888
16,318
70,008
79,000
20,026
76,032
107,620
24,690
93,903
138,233
22,532
95,282
108,818
24,143
79,726
116,828
16,783
70,518
194,160
26,968
98,983
96,236
14,500
59,534
135,645
19,205
69,290
HARP >80-105 LTV
FRM 30 (incl FRM 25 & 40)
FRM 20
FRM 15
9,174
1,034
1,731
10,617
1,186
1,957
9,030
1,253
1,948
11,054
1,328
2,185
11,232
2,257
2,973
10,306
2,323
2,437
12,115
2,702
3,787
10,138
689
1,385
15,931
3,683
5,265
14,025
1,998
3,170
22,495
4,086
5,445
13,788
2,394
3,364
18,999
3,333
5,003
HARP >105-125 LTV
FRM 30 (incl FRM 25 & 40)FRM 30 (incl FRM 25 & 40)
FRM 20
FRM 15
1 5141,514
142
1 8151,815
141
1 5461,546
139
1 7941,794
144
2 1912,191
268
1 9991,999
257
1 9841,984
267
1 2601,260
100
3 6543,654
451
3 4443,444
384
6 9216,921
892
5 1415,141
436
8 9018,901
1,477
HARP > 125 LTV
FRM 30 (incl FRM 25 & 40)
FRM 20
FRM 15
701
52
1,362
102
1,425
89
1,818
176
All Other Streamlined Refis
FRM 30 (incl FRM 25 & 40)
FRM 20
FRM 15
19,931
3,041
11,736
20,461
3,062
16,400
15,990
3,392
12,681
21,005
3,016
13,989
20,180
6,914
22,133
16,933
7,123
14,567
20,197
9,383
20,667
24,025
7,033
20,437
19,126
6,163
15,810
21,919
4,278
15,308
32,574
6,778
20,875
15,907
3,158
10,956
23,357
4,151
15,700
Federal Housing Finance Agency
Appendix: Data Tables
Refinance Report May 2012
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Freddie Mac - Loan Count by LTV and Product (Mortgage Term)
May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12
Total Refinances
FRM 30 (incl FRM 25 & 40)
FRM 20
FRM 15
33,753
6,198
20,884
34,865
4,967
22,417
28,413
5,632
20,490
36,296
6,110
25,941
42,304
8,074
38,274
50,683
11,639
45,030
53,169
14,547
51,385
48,918
10,228
47,470
64,406
13,772
47,423
65,538
10,227
43,334
81,006
17,029
58,863
43,422
8,785
35,155
51,153
10,696
44,461
HARP >80-105 LTV
FRM 30 (incl FRM 25 & 40)
FRM 20
FRM 15
6,221
1,140
1,416
6,282
821
1,503
6,433
1,237
1,407
6,333
1,131
1,360
7,872
1,454
2,346
8,167
1,937
2,523
7,860
1,861
2,274
6,512
454
981
13,567
2,796
4,733
10,839
1,686
2,499
17,503
3,641
4,211
9,384
2,047
2,781
12,263
2,471
3,363
HARP >105-125 LTV
FRM 30 (incl FRM 25 & 40)FRM 30 (incl FRM 25 & 40)
FRM 20
FRM 15
2 2692,269
137
106
2 9902,990
114
201
2 4442,444
164
171
2 6462,646
89
167
2 7802,780
268
268
2 6062,606
169
203
2 3842,384
216
302
1 1741,174
79
105
4 7424,742
374
544
3 8273,827
328
402
9 1399,139
936
821
4 8494,849
436
782
6 0626,062
1,103
1,108
HARP > 125 LTV
FRM 30 (incl FRM 25 & 40)
FRM 20
FRM 15
670
49
79
1,200
96
126
1,840
226
147
807
79
74
All Other Streamlined Refis
FRM 30 (incl FRM 25 & 40)
FRM 20
FRM 15
7,231
2,474
6,301
6,881
1,626
5,782
5,292
1,972
5,698
7,126
1,864
6,568
8,659
2,973
10,680
9,820
3,691
11,803
9,157
4,116
10,459
12,875
3,067
13,717
9,127
2,777
9,516
8,733
2,066
8,447
11,959
3,278
10,553
4,264
1,911
6,856
9,049
2,160
7,951
Federal Housing Finance Agency
Appendix: Data Tables
Refinance Report May 2012
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Federal Housing Finance Agency Refinance Report May 2012 Appendix: State Level Data
Enterprises Refinance Activity by State - May 31, 2012
1 Inception to Date - Since April 1, 2009, the inception of HARP. 2 Consists of Guam, Puerto Rico, Virgin Islands and other loans for which data are not available. 3 State and national totals differ due to timing differences.
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Refinance Report
May 2012
Federal Housing Finance Agency
Appendix: State Level Data
Fannie Mae Refinance Activity by State - May 31, 2012
1 Inception to Date - Since April 1, 2009, the inception of HARP. 2 Consists of Guam, Puerto Rico, Virgin Islands and other loans for which data are not available.
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Federal Housing Finance Agency Refinance Report May 2012
Appendix: State Level Data
Freddie Mac Refinance Activity by State - May 31, 2012
1 Inception to Date - Since April 1, 2009, the inception of HARP. 2 Consists of Guam, Puerto Rico, Virgin Islands and other loans for which data are not available. 3 State and national totals differ due to timing differences.
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