federal housing finance agencyfederal housing finance agency · 2014-01-22 · mortgage payments...

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


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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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

Page 3Page 3Page 3

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


e

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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


* 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%


27%

Page 7Page 7

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


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 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 20

FRM 15

701

52

1,362

102

1,425

89

1,818

176

All Other Streamlined Refis


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



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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 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 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 20

FRM 15

670

49

79

1,200

96

126

1,840

226

147

807

79

74

All Other Streamlined Refis


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




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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.

Page 11

Refinance Report

May 2012


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.

Page 12


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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