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HARP Mortgage Refinance
HARP Mortgage Refinance Picks Up
Steam In September
December 7, 2011

HARP mortgage refinance was up 20% in September. Approximately 35,000 Fannie Mae
and Freddie Mac mortgages were financed through the Home Affordable Refinance
Program (HARP).

This increase in mortgage refinance occurred just before the new changes to HARP were
announced. The new and improved HARP (HARP 2.0) is expected to make refinancing
easier for thousands of homeowners facing foreclosure. The original HARP required a
loan-to-value of between 80% and 125%. With HARP 2.0 there is no maximum loan-to-value
limit. This allows underwater borrowers a chance at refinancing. There are about 11 million
homeowners who owe more on their mortgages than the houses are worth.

Lenders and servicers that participate in HARP have refinanced over 928,000 mortgages
backed by Fannie Mae and Freddie Mac as of the end of the third quarter. This is a 11%
increase from the previous quarter.

The majority of refinances are still done outside of Fannie and Freddie. However with the
new changes to HARP, the government refinance program is finally gaining traction. The
increase in refinance activity can also be a reaction to mortgage rates.

Rates slipped below 4.0%, giving borrowers the incentive to jump on the bandwagon and
refinance. Monthly volume for HARP mortgages increased in the third quarter of this year.

The news was also upbeat on the foreclosure front. Lenders started foreclosures on 224,000
homes, down 11% from the previous quarter according to FHFA. Servicers are working
harder to prevent foreclosures. They completed about 140,000 foreclosure preventions on
Fannie Mae and Freddie Mac mortgages.

They were 83,000 loan modifications in the third quarter. And short sales and deeds-in-lieu
of foreclosure added another 31,000 homes saved from foreclosure.

Will this level of activity continue? We believe so. Homeowners are getting the message.
They are being more organized with their paperwork and are getting the required
documents to the lenders in a timely fashion. In addition, the servicers and lenders realize
that they will be held accountable for they actions. "We can not find the file. Send the
information again" is no longer acceptable.