Rising mortgage rates significantly drove down refinance volume in the third quarter, data from the Federal Housing Finance Agency (FHFA), regulator of government-sponsored enterprises Fannie Mae and Freddie Mac, shows.
The GSEs completed 253,135 refinances during the quarter, down from, 299,460 in the second quarter, according to the agency.
The FHFA’s third quarter Refinance Report also shows that 1,865 loans were refinanced through the Home Affordable Refinance Program (HARP), bringing the total number of HARP refinances to 3,493,005 since inception of the program in 2009.
HARP is scheduled to expire next month. However, the program has been extended numerous times.
The FHFA says 38,818 borrowers could still benefit financially from a HARP refinance. These borrowers meet the basic HARP eligibility requirements and have a remaining balance of $50,000 or more on their mortgage, a remaining term on their loan of greater than 10 years, and a mortgage interest rate that is at least 1.5% higher than current market rates.
These borrowers could save an average of $2,290 annually by refinancing their mortgage through HARP, the agency says.
More than 70% of these borrowers are concentrated in Puerto Rico, Illinois, New Jersey, Florida, Michigan, Ohio, Pennsylvania, Maryland, Alabama and Georgia.
During the third quarter, roughly 33% of HARP refinances for underwater borrowers were for shorter-term 15- and 20-year mortgages, which build equity faster than traditional 30-year mortgages.