JACKSONVILLE, Fla. – With overall mortgage prepayment activity stable, and with historically low rates, the federal government's Home Affordable Refinance Program has seen considerable activity since the beginning of 2012 according to a recent LPS Applied Analytics report.
The program is a big part of the current administration's strategy to help homeowners avoid foreclosure, stabilize the housing market and improve the nation's economy. Through HARP, a federal program, eligible homeowners can lower their monthly mortgage payments. The move allows the opportunity to get into more stable loans at today's low rates.
According to Herb Blecher, senior vice president at LPS – who wrote the report – Fannie Mae and Freddie Mac 30-year fixed-rate loans were examined across a variety of loan-to-value ratios. “Since the beginning of this year, high loan-to-value refinances have increased significantly,” he said in a statement to the press presenting the results.
The data also showed that the rate of new problem loans entering the delinquency pipeline remained stable and at a multi-year low. Late-stage delinquencies have also shown improvement over the last year, dropping more than seven percent. The national delinquency rate for loans 90 or more days delinquent remained stable, but after months of tracking very closely, the rate in judicial foreclosure states is now higher than in non-judicial.
The share of aged inventory is higher in judicial states as well, with nearly 50 percent of borrowers with loans 90 or more days delinquent not having made a payment in more than one year, as compared to just slightly more than 40 percent in non-judicial states. Further, nearly 60 percent of borrowers with loans in foreclosure in judicial states had not made a payment in at least two years, as of June 2012.