5.6 More Homeowners Have Potential to Qualify for Home Affordable Refinance
By: Katie Curnutte, Zillow PR Manager | July 1, 2009
Good news for underwater homeowners who owe more than 105% of the current value of their home: Fannie Mae and Freddie Mac will now refinance conforming mortgages with a loan-to-value ratio of up to 125%, under the Home Affordable Refinance Program (HARP). According to our analysis of the Q1 Zillow Real Estate Market Reports, that means up to 36% of all homeowners with mortgages, or 20.1 million households, could now potentially qualify for the plan.
Until HUD Secretary Shaun Donovan’s announcement this morning, only homeowners with conforming loans who owed between 80% to 105% of the value of their home qualified, which could have reached up to 26% of all homeowners with mortgages (read our original info on Making Home Affordable from last March). With today’s announcement, that’s 5.6 million more homeowners who could qualify.
Of course, not all of these loans are backed by Fannie Mae or Freddie Mac, a necessity to qualify for the HARP loan program. Information on which loans are backed by Fannie or Freddie isn’t publicly available, so we can’t calculate those numbers. (Check if your loan is backed by Fannie or Freddie here).
According to Bloomberg, Fannie and Freddie have so far refinanced 80,000 mortgages through HARP.
The HARP refi is now for homeowners with a conforming first mortgage backed by Fannie or Freddie who owe between 80-125% of the value of their home. There is also a loan modification program, called Home Affordable Modification Program (HAMP), that may help those homeowners who don’t qualify to refinance, but may be at risk of losing their homes to foreclosure.
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- Categories: HARP, Mortgages
Comments
12 Comments so far
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Matt Carter on July 2, 2009 9:35 am
I guess this raises the question of what about the other 64 percent? Are most of the borrowers in that group below 80 percent LTV? How many are above 125 percent LTV?
Matt Carter on July 2, 2009 1:23 pm
Looks like only 20,000 of those 80,000 refis Bloomberg reported on had LTVs above 80 percent…
Du proprio Montreal – Cutting through the noise « Du proprio Montreal on July 2, 2009 1:28 pm
[...] a blog post, Zillow reported that 14.6 million borrowers, or 26 percent of U.S. homeowners with mortgages, have loan-to-value [...]
Matt Carter on July 2, 2009 3:05 pm
Since we don’t how many of these people aren’t eligible because their loans aren’t owned by Fannie or Freddie, we also could ask how many ARE NOT eligible because their LTV is too high.
I understand that Zillow’s numbers show 16.5 percent of conforming first mortgages have LTVs above 105 percent. That’s 9.2 million borrowers who were therefore excluded from the Home Affordable Refinance Program under the previous limit.
The percentage of loans above the new 125 percent LTV ceiling is 6.6 percent, or 3.7 million borrowers.
We don’t know for sure how many of the 5.6 million borrowers in the 105 to 125 percent LTV range will qualify for the program, but we can say the estimated 3.7 million folks above 125 LTV will not.
Esko Kiuru on July 5, 2009 7:16 pm
Katie,
Increasing the LTV to 125% is of course good news, especially in hard-hit areas like Las Vegas and Phoenix. However, banks weren’t very excited about refinancing at the 105% level, so why would they do it now. Unless they get huge financial incentives from the taxpayer, they’ll continue watching things from the sidelines.
Dustin on July 7, 2009 7:28 am
This plan, of course, forgets to help those of us who have a 1st and 2nd mortgage. What good is it to refi the 1st if you can’t roll the 2nd into the loan! What a crock of S.
Christy on July 8, 2009 11:31 am
Yes, my 2nd mortgage company refuses to subordinate if I refi therefore, the $200 I could be saving a month is a no go all because my 2nd mortgage company refuses to subordinate. Doesn’t make any sense at all…
Loan Modification on July 9, 2009 2:46 am
i thought the cap at 125% originally was a great thing until i submitted 16 files that were fannnie held; only 2 were approved. maybe theres something i’m missing…??
100% Mortgage on August 5, 2009 4:38 am
Is this dependent on available equity? Halifax and Nationwide have recently offered similar in the UK.
ali, get rid of debt on August 5, 2009 4:56 am
There still seems to be a very strict credit approval criteria, where basically most people who do not want finance are offered it, and the ones that do are not.
Loan Modification on August 5, 2009 12:34 pm
Very interesting post
Brian on August 12, 2009 9:37 am
A lot of those who don’t qualify for the Refi and are not sure about a loan modification should do some homework. You may be able to get a better deal through modification. I came across a site while doing my research that is actual free to homeowners. The info contained made me feel a lot more confident when approaching my lender. They also offer a private auction style bidding if you want to see what it would cost to have your transaction handled by a professional. The site is http://www.getloanmodified.com.
Good luck