Transcription
REFINANCE REPORTApril 2016
FHFA Refinance ReportApril 2016 Highlights Total refinance volume increased in April 2016 after a decrease inmortgage rates in the first quarter. Mortgage rates decreased in April:the average interest rate on a 30‐year fixed rate mortgage fell to 3.61percent from 3.69 percent in March.In April 2016: Borrowers completed 6,347 refinances through HARP, bringingtotal refinances from the inception of the program to 3,406,890. HARP volume represented four percent of total refinancevolume. Six percent of the loans refinanced through HARP had a loan‐to‐value ratio greater than 125 percent.Year to date though April 2016: Borrowers with loan‐to‐value ratios greater than 105 percentaccounted for 22 percent of the volume of HARP loans. Twenty six percent of HARP refinances for underwaterborrowers were for shorter‐term 15‐ and 20‐year mortgages,which build equity faster than traditional 30‐year mortgages. HARP refinances represented 10 or more percent of totalrefinances in Florida and Georgia, more than double the 4percent of total refinances nationwide over the same period. Borrowers who refinanced through HARP had a lower delinquencyrate compared to borrowers eligible for HARP who did not refinancethrough the program. Ten states accounted for over 60 percent of the nation's HARPeligible loans with a refinance incentive as of December 31, 2015.April 2016Overview and Eligibility of the HomeAffordable Refinance Program (HARP)HARP OverviewHARP was established in 2009 to assist homeowners unable to access arefinance due to a decline in their home value. The inception date ofthe program was April 1, 2009.The program is designed to provide these borrowers with anopportunity to refinance by permitting the transfer of existing mortgageinsurance to their newly refinanced loan, or by allowing those withoutmortgage insurance on their previous loan to refinance withoutobtaining new coverage.HARP enhancements took effect in 2012 to increase access to theprogram for responsible borrowers. The program was scheduled toexpire on December 31, 2013, and was extended to expire onDecember 31, 2015. On May 8, 2015, HARP was extended again toexpire December 31, 2016.HARP EligibilityBelow are the basic HARP eligibility criteria: Loan must be owned or guaranteed by Fannie Mae or Freddie Mac. Loan must have been originated on or before May 31, 2009. Current loan‐to‐value ratio ‐‐ LTV ‐‐ (outstanding mortgagebalance/home value) must be greater than 80 percent. There is no LTVceiling. Borrower must be current on their mortgage payments at the time ofthe refinance. Payment history – borrower is allowed one late payment in the past12 months, as long as it did not occur in the 6 months prior to therefinance.Page 1
FHFA Refinance ReportApril 2016Total refinance volume increased in April 2016 after a decrease in mortgage rates over the first quarter. Mortgagerates decreased in April: the average interest rate on a 30‐year fixed rate mortgage fell to 3.61 percent from 3.69percent in March.Mortgage Rates vs Refinance VolumeA BC6.48GFEDJH IKL600,000500,0006.044.71400,0005.29Average InterestRate on a 30- YearMortgage4.494.464.934.07300,0003.96200,0003.35 3.574.163.98 3.963.864.343.694.163.613.89Number of MortgagesRefinanced by FannieMae and Freddie Mac100,000* Mortgage rates are from the Freddie Mac Primary Mortgage Market Survey, monthly average, from the Freddie Mac website.020082009201020112012201320142015Source: FHFA (Fannie Mae and Freddie Mac)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 ‐ Treasury rates sharply rose and reached a 2009 highon a better than expected June unemploymentreport.E ‐ 30‐year mortgage rates reached 4.17 percent inearly November, marking the lowest level observedsince Freddie Mac began tracking rates in 1971.F ‐ Treasury rates fell amid ongoing concerns of a growingdebt crisis in Europe.G ‐ 30‐year mortgage rates reached new historic lows inNovember 2012.H ‐ Mortgage rates rose after Federal Reserve ChairmanBernanke stated in late May that the central bank wasconsidering slowing its 85 billion per month bond buyingprogram known as quantitative easing.I ‐ Highest rate for a 30‐year mortgage since July 2011.J ‐ 30‐year mortgage rates reached a monthly average of 3.67percent in January, the lowest level seen since mid 2013.K ‐ 30‐year mortgage rates reached a monthlyaverage of 4.05 percent in July 2015, thehighest level observed since September 2014,amid expectations of a rate hike by the FederalReserve.L ‐ The Federal Reserve raised the target federalfunds rate from a range of 0%‐0.25% to arange of 0.25%‐0.5% on 12/16/15 in responseto a strenghtening economy.Page 2
FHFA Refinance ReportApril 2016In April 2016, 6,347 refinances were completed through HARP, bringing total refinances through HARPfrom the inception1 of the program to 3,406,890.Refinances Through April 2016Total RefinancesFannie MaeFreddie MacTotalTotal HARPFannie MaeFreddie MacTotalHARP LTV 80% -105%Fannie MaeFreddie MacTotalHARP LTV 105% -125%Fannie MaeFreddie MacTotalHARP LTV 125%Fannie MaeFreddie MacTotalAll Other Streamlined RefisFannie MaeFreddie MacTotalApril2016Year toDate 20162015Inceptionto 5511 Inception- April 1, 2009Source: FHFA (Fannie Mae and Freddie Mac)Page 3
FHFA Refinance ReportApril 2016In April 2016, 6,347 loans were refinanced through HARP, representing 4 percent of total refinance volume duringthe month.HARP Refinance, Quarterly Volume(Number of loans in 502001501391501005001058894106 728510266 961017411519718543 7718216914940 3213030 54 4410937 323121 163277 747215 13 13 26 21 2062615856565314 48 4610 8 847 3328 22 19 19 15 131712784741 5040 39 402Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15 16Percent2% 8% 11% 14% 15% 12% 11% 14% 17% 16% 10% 17% 27% 26% 22% 21% 22% 23% 23% 21% 16% 11% 9% 6% 5% 5% 5% 5%of TotalRefinances6 Freddie MacApr16Fannie Mae4%.Source:FHFA (Fannie Mae and Freddie Mac)Page 4
FHFA Refinance ReportApril 2016From inception1 through April 2016, 2,851,269 loans refinanced through HARP were for primary residences,108,370 were for second homes and 447,251 were for investment properties.HARP Loans by Property TypeInception through April 2016TotalTotal HARPFannie MaeFreddie MacTotalHARP LTV 80% -105%Fannie MaeFreddie MacTotalHARP LTV 105% -125%Fannie MaeFreddie MacTotalHARP LTV 125%Fannie MaeFreddie 547,9427,54815,49054,38730,63185,018Source: FHFA (Fannie Mae and Freddie Mac)1Inception- April 1, 2009Page 5
FHFA Refinance ReportApril 2016In April 2016, 6 percent of the loans refinanced through HARP had a loan‐to‐value ratio greater than 125percent.Monthly HARP Volume by Loan-to-Value Ratio140,000HARP LTV 80%-105%120,000100,00080,000HARP LTV 105%-125%HARP LTV 125%60,00040,00020,00001Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun SepDec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Apr09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15 161The number of completed HARP refinances reported for deeply underwater borrowers increased sharply in June 2012 as further enhancements to HARP went into effect. StartingJune 1, 2012, lenders became able to deliver loans with loan‐to‐value ratios greater than 125 percent refinanced through HARP to the Enterprises to be securitized.Source: FHFA (Fannie Mae and Freddie Mac)Page 6
FHFA Refinance ReportApril 2016Year to date through April 2016, borrowers with loan‐to‐value ratios greater than 105 percent accounted for22 percent of the volume of HARP loans. The proportion of HARP refinances for underwater borrowers (LTVgreater than 105 percent) refinancing to shorter term mortgages accounted for 26 percent. Shorter term 15‐and 20‐year mortgages build equity faster than traditional 30‐year mortgages.Percentage of HARP Refinancesby Loan-to-Value Ratio100%100%LTV 80%-105%80%56% 60%60%91%73% 76% 78%80%60%30-year291%72% 74%82% 80% 75%40%40%44% 40%20%0%Mortgage Term of HARP Refinancesof Underwater Borrowers(LTV Greater than 105%)9%27% 24% 22%LTV 105%1InceptionIncep Full Full Full Full Year toto Dec-tion Year Year Year Year Date2011to 2012 2013 2014 2015 2016Dec1 Includes HARP LTV 105%-125% and HARP LTV 125%.2011Source: FHFA (Fannie Mae and Freddie Mac)20%0%9%25% 28% 26%15- and 20-year18% 20%InceptionIncep Full Full Full Full Year toto -tionDec Year Year Year Year Date2011to 2012 2013 2014 2015 2016Dec2 Includes 25-year and 40-year mortgages.2011Source: FHFA (Fannie Mae and Freddie Mac)Page 7
FHFA Refinance ReportApril 2016Borrowers who refinanced through HARP had a lower delinquency rate compared toborrowers eligible for HARP who did not refinance through the program.Ever 90 Days Delinquency Rate1: Fannie Mae and Freddie MacRefinance orEligibility MonthJune 2009June 2010June 2011June 2012June 2013June 2014CategoryLoans Refinanced through HARP2Loans Eligible for HARP3Loans Refinanced through HARPLoans Eligible for HARPLoans Refinanced through HARPLoans Eligible for HARPLoans Refinanced through HARPLoans Eligible for HARPLoans Refinanced through HARPLoans Eligible for HARPLoans Refinanced through HARPLoans Eligible for HARP 6%2.8% % 4%6.1%7.5%3.9%6.3%2.1%5.3%1.9%3.4%Source: FHFA (Fannie Mae and Freddie Mac)Notes1. This measures the cumulative percentage of loans that have become 90 or more days delinquent in any of the months after June 2009, 2010, 2011 , 2012, 2013 or 2014 (the refinance or eligibility date)through December 2015 for loans refinanced through HARP or eligible for HARP.2. This measures the ever 90 day delinquency percentage for loans refinanced through HARP during the month of June 2009, 2010, 2011, 2012 , 2013 or 2014.3. This measures the ever 90 day delinquency percentage for loans that were eligible for refinancing through HARP but were not refinanced through the program as of the end of the reporting month of June2009, 2010, 2011, 2012, 2013 or 2014. LTVs as of the eligibility date for loans are estimated using internal Fannie Mae and Freddie Mac house price indices at a zip code level. This measure may beunderstated because some loans may have later been paid off or refinanced through HARP.Fannie Mae defines a HARP eligible loan as being current on payments for the last 6 months with at most a single missed payment in the last 12 months for both HARP 1 and HARP 2 eligibility; Freddie Macdefines a HARP eligible loan as being current on payments for the last 12 months for HARP 1 (2009-2011) eligibility, or current on payments for the last 6 months with at most a single missed payment in thelast 12 months for HARP 2 (2012 onward) eligibility.Other eligibility rules specific to Fannie Mae and Freddie Mac may also apply.Page 8
FHFA Refinance ReportApril 2016Borrowers who refinanced through HARP had a lower delinquency rate compared toborrowers eligible for HARP who did not refinance through the program.14%12%10%8%6%4%2%0%Jun 09Ever 90 Days Delinquency Rate1Fannie Mae and Freddie MacJun 10Jun 11Loans eligible for but notrefinanced through HARP2June 2009June 2010June 2011June 2012June 2013June 2014NotesJun 12Jun 13Jun 14Jun 15Loans refinancedthrough HARP3LTV 80%-105%LTV 80%-105%; 105%-125%LTV 80%-105%; 105%-125%LTV 80%-105%; 105%-125%; 125%LTV 80%-105%; 105%-125%; 125%LTV 80%-105%; 105%-125%; 125%Source: FHFA (Fannie Mae and Freddie Mac)1. This measures the cumulative percentage of loans that have become 90 or more days delinquent in any of the months after June 2009, 2010, 2011, 2012, 2013 or 2014 (the refinance or eligibility date)through December 2015 for loans refinanced through HARP or eligible for HARP.2. This measures the ever 90 day delinquency percentage for loans that were eligible for refinancing through HARP but were not refinanced through the program as of the end of the reporting month of June2009, 2010, 2011, 2012, 2013 or 2014. LTVs as of the eligibility date for loans are estimated using internal Fannie Mae and Freddie Mac house price indices at a zip code level. This measure may beunderstated because some loans may have later been paid off or refinanced through HARP.3. This measures the ever 90 day delinquency percentage for loans refinanced through HARP during the month of June 2009, 2010, 2011, 2012, 2013 or 2014.Fannie Mae defines a HARP eligible loan as being current on payments for the last 6 months with at most a single missed payment in the last 12 months for both HARP 1 and HARP 2 eligibility; Freddie Macdefines a HARP eligible loan as being current on payments for the last 12 months for HARP 1 (2009 to 2011) eligibility, or current on payments for the last 6 months with at most a single missed payment inthe last 12 months for HARP 2 (2012 onward) eligibility.Other eligibility rules specific to Fannie Mae and Freddie Mac may also apply.Page 9
FHFA Refinance ReportApril 2016HARP continued to account for a substantial portion of total refinance volume in certain states. Year to datethrough April 2016, HARP refinances represented 10 percent or more of total refinances in Florida and Georgia,more than double the 4 percent of total refinances nationwide over the same period.Underwater borrowers accounted for a large portion of HARP refinances in a number of states. Year to datethrough April 2016, underwater borrowers represented 34 percent or more of HARP volume in Nevada andFlorida.Total HARP as a Percentage ofHARP LTV 105% as a Percentage ofTotal RefinancesTotal n8%9%2%California16%Georgia10%14%Inception to Dec 2011Full Year 2012Full Year 2013Full Year 2014Full Year 2015Year to Date 20168%10%All States4%0%20%40%60%Source: FHFA (Fannie Mae and Freddie %13%18%15%13%9%25%21%11%21%Inception to Dec 2011Full Year 2012Full Year 2013Full Year 2014Full Year 2015Year to Date 201629%9%All States22%0%20%40%60%80%100%Source: FHFA (Fannie Mae and Freddie Mac)Page 10
FHFA Refinance ReportApril 2016Ten states accounted for over 60 percent of the nation's HARP eligible loans with a refinance incentive. Thenational total of HARP eligible loans with a refinance incentive was 325,295 as of December 31, 2015. Additionalinformation can be found in an interactive map at www.HARP.gov.HARP Eligible Loans with a Refinance Incentive*Top Ten Statesas of December 31, 57New Jersey13,139Maryland10,939New York10,889010,00020,00030,00040,00050,000Source: FHFA (Fannie Mae and Freddie Mac)* FHFA uses the following criteria to identify HARP eligible loans: Conventional loans originated before 6/1/2009; unpaid principal balance greater than 80 percent of current propertyvalue; and meet the payment history requirement of no delinquencies in the prior six months and at most one delinquency in the prior 12 months. To estimate the HARP-eligible with arefinance incentive population, FHFA applies the following filters to the HARP-eligible loans: Remaining balance greater than 50,000; remaining term greater than ten years, andnote rate 150 basis points (1.5%) above the market rate.Page 11
FHFA Refinance ReportApril 2016Appendix: Data TablesFannie Mae and Freddie Mac - Monthly Refinance Volume (# of 244,5472,7797,3263,9142,4336,347HARP LTV 80% -105%Fannie MaeFreddie 019HARP LTV 105% -125%Fannie MaeFreddie 04215,5378,8245,38414,208Total RefinancesFannie MaeFreddie MacTotalTotal HARPFannie MaeFreddie MacTotalHARP LTV 125%Fannie MaeFreddie MacTotalAll Other Streamlined RefisFannie MaeFreddie MacTotalNotes: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 have 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 theirmortgage payments can refinance and reduce their monthly mortgage payments at loan-to-value ratios above 80 percent without any maximum loan-to-value limit.Starting with the November 2012 Refinance Report, the definition of HARP for Fannie Mae has been expanded to include second home and investment property refinances with LTVs greater than 80 percent, which is consistentwith the definition of HARP for Freddie Mac since the inception of the program.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 forloans 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. Loansmay be originated by any Freddie Mac approved servicer.Page 12
FHFA Refinance ReportApril 2016Appendix: Data TablesFannie Mae - Loan Count by LTV and Product (Mortgage -15Dec-15Jan-16Feb-16Mar-16Apr-16Total RefinancesFRM 30 (incl FRM 25 & 40)FRM 20FRM 7129,85563,0358,40830,924HARP 80-105 LTVFRM 30 (incl FRM 25 & 40)FRM 20FRM ARP 105-125 LTVFRM 30 (incl FRM 25 & 40)FRM 20FRM 4296974HARP 125 LTVFRM 30 (incl FRM 25 & 40)FRM 20FRM 6236253618840191681462258275025133181222050All Other Streamlined RefisFRM 30 (incl FRM 25 & 40)FRM 20FRM 3,6991,0263,2844,4261,3203,7144,0791,1303,581Page 13
FHFA Refinance ReportApril 2016Appendix: Data TablesFreddie Mac - Loan Count by LTV and Product (Mortgage -15Dec-15Jan-16Feb-16Mar-16Apr-16Total RefinancesFRM 30 (incl FRM 25 & 40)FRM 20FRM 220,30739,7445,32218,246HARP 80-105 LTVFRM 30 (incl FRM 25 & 40)FRM 20FRM 41,2022603801,0682793681,3533425031,169262426HARP 105-125 LTVFRM 30 (incl FRM 25 & 40)FRM 20FRM P 125 LTVFRM 30 (incl FRM 25 & 40)FRM 20FRM 119013431371239165933164163512416321202438All Other Streamlined RefisFRM 30 (incl FRM 25 & 40)FRM 20FRM 1,9462,5548492,6322,3107182,332Page 14
April 2016FHFA Refinance ReportAppendix: State Level DataEnterprises Refinance Activity by State -April 30, 2016April PARISCSDTNTXUTVAVTWAWIWVWYOther 2,8154,7752725,8583,582376396297168,2121OtherHARP LTVHARP LTVHARP LTVStreamlined 105% 125% 80% Year-to-Date ,12420,37112,4261,4681,3601,197597,697Inception to Date1OtherHARP LTVOtherHARP LTVHARP LTVTotalHARP LTVHARP LTVHARP LTVStreamlined 105% Total HARPStreamlined 105% Total HARP 125%Refinances 125% 80% -105% 80% - ,362 3,406,890Inception to Date - Since April 1, 2009, the inception of HARP.of Guam, Puerto Rico, Virgin Islands and other loans for which data are not available.2 ConsistsPage 15
April 2016FHFA Refinance ReportAppendix: State Level DataFannie Mae Refinance Activity by State - April 30, 2016April PARISCSDTNTXUTVAVTWAWIWVWYOther 132,206188265246103,720OtherHARP LTVHARP LTVHARP LTVStreamlined 105% 125% 80% 572192Year-to-Date 1Inception to DateOtherHARP LTVOtherHARP LTVHARP LTVTotalHARP LTVHARP LTVHARP LTVStreamlined 105% Total HARPStreamlined 105% Total HARP 125%Refinances 125% 80% -105% 80% ,433,360325,896255,814 2,015,070Inception to Date - Since April 1, 2009, the inception of HARP.of Guam, Puerto Rico, Virgin Islands and other loans for which data are
Affordable Refinance Program (HARP) FHFA Refinance Report April 2016 Borrowers completed 6,347 refinances through HARP, bringing total refinances from the inception of the program to 3,406,890. volume represented four percent of total refinance Six percent of the loans refinanced through HARP had a loan‐
