HARP reported successful results in 2012 in providing much needed relief for many homeowners seeking to resolve their painful dilemmas.
Approximately 1.1 million loans were refinanced in 2012, representing double the prior year volume, which is concrete evidence that enhancements in the program have made them more attractive to those needing refinancing.
These improvements were a major factor in substantially reducing the incidence of underwater borrowers to under 15% at year-end 2012, compared with over 25% at prior year-end.
Florida and Nevada, two of the hardest hit states when the housing bubble burst, led the way. Although both states continue to report large numbers of loans over 90 days past due at year-end 2012 per the Mortgage Brokers Association, they also reported the highest rates of refinancing. In December 2012 58% of refinanced loans in Florida were under the HARP program and 68% in Nevada. Cities in Florida, such as Miami, Fort Lauderdale, Naples and Tampa, head the list of those who will benefit most from the HARP 2.0 refinancing.
HARP 2.0, which was implemented last year, specifically provides relief to homeowners who are more than 25% under water, removing a limitation that was part of the original HARP launched in 2009. Consequently approximately 25% of the December HARP loans were to homeowners 25% or more under water. New HARP guidelines removed this requirement and now allow even those homeowners with a Loan-to-Value ratio over 200% to qualify and take advantage of the low interest rates, thereby save their homes from foreclosures
An additional feature of the current version of HARP is that it permits borrowers to deal with any lender, not just their existing mortgage lender. Also, it gives lenders more protection against buy-back demands from investors.
HARP is playing a major role in allowing homeowners who are underwater to remain in their homes rather than default on their mortgages.
The combination of refinancing through HARP, low interest rates and financial institutions having rebuilt their lending capacity have made a major contribution in reducing homes for sale in inventory to a level of around 1.7 million homes, a level not seen in the last ten years. As a percentage at year-end 2012 the number of homes in foreclosure declined by 0.66% to 3.74%.
Other signs of economic recovery are home prices, projected to rise nationally by 8% in 2013. This increase compares favorably with a 4.7% improvement in 2012. At the same time based on first month sales in January of 2013, home sales are expected to rise by nearly 43% over 2011 to nearly five million in annual sales.
Now is the time to refinance in into the harp before it is scheduled to end on Dec 31, 2013.