The Federal Housing Finance Agency is looking at raising the 125% LTV cap on refinancing underwater borrowers while considering other enhancements to the Home Affordable Refinancing Program, according to agency acting director Edward DeMarco.
While the outcome of FHFA's review is uncertain, the GSE regulator says it is "worthwhile and consistent with our conservatorship responsibilities."
In the statement issued Friday afternoon, DeMarco also noted the HARP program has refinanced fewer borrowers than expected.
"FHFA is carefully reviewing the mechanics of the HARP program to identify possible enhancements that would reduce barriers for borrowers already otherwise eligible to refinance using HARP," DeMarco said.
"If there are frictions associated with the origination of HARP loans that can be eased while still achieving the program's intent of assisting borrowers and reducing credit risk for the Enterprises, we will seek to do so," he added.
The GSE regulator also is analyzing Fannie and Freddie loans with loan-to-value ratios above 125% for inclusion in the HARP program.
"There are several challenges to work through here and the outcome of this review is uncertain," DeMarco cautioned.
The FHFA acting director also noted his staff is consulting with a range of stakeholders about the various "frictions" in HARP and what can be done to ease them.
