The Federal Housing Finance Agency has extended a special program for one year so more borrowers can refinance and lower their mortgage payments.
The Home Affordable Refinance Program allows Fannie Mae and Freddie Mac to refinance high LTV loans without requiring the borrowers to purchase mortgage insurance.
In 2010, the government sponsored enterprises refinanced over 433,000 loans with loan-to-value ratios between 80% and 125%.
HARP is designed to help borrowers refinance and reduce the default risk on loans the GSEs already own or guarantee. The refinancing program was due to expire at the end of June. Now it has been extended until June 30, 2012.
"The program expands access to refinancing for qualified individuals and families whose homes have lost value," FHFA acting director Edward DeMarco said.
Late last year, Fannie and Freddie announced increases in certain loans’ fees that are going into effect in March and April. The GSE regulator exempted HARP refinancings from these fee hikes.
The regulator also clarified that GSE loans originated before May 2009 can be refinanced under the HARP program. Apparently, Fannie and Freddie had different eligibility dates.
Fannie and Freddie completed nearly 403,000 HARP refinancings of loans in the 80% to 105% LTV ratio bracket in 2010 and another 30,600 loans in the 105% to 125% bracket.
