* Borrowers will have until 2015 to win a new loan
* More than 2.2 million have used Home Affordable Refinance
By Margaret Chadbourn
WASHINGTON, April 11 The top U.S. housing
regulator on Thursday extended by two years a popular federal
refinancing program to allow more borrowers with
government-backed loans to lower their monthly mortgage
The Home Affordable Refinance Program, or HARP, allows
borrowers with loans backed by Fannie Mae and Freddie
Mac to cut loan payments by refinancing at record low
interest rates even if their homes have lost value.
The Federal Housing Finance Agency, which oversees Fannie
Mae and Freddie Mac, said it would extend the program until the
end of 2015. It had been set to expire at the end of this year.
"We are extending the program so more 'underwater' borrowers
can benefit from lower interest rates," Edward DeMarco, the
acting director of the FHFA, said in a statement. He said that
HARP has proven to be a "useful tool for reducing risk."
More than 2.2 million homeowners have used refinanced
mortgages through HARP since the Obama administration rolled out
the program in 2009. It is viewed as one of the more successful
anti-foreclosure programs started by the government in the wake
of the housing market's collapse.
The program's extension was expected because of its growing
reach and increasing popularity among lenders. Banks can often
charge more on HARP loans because borrowers are not always
paying traditional fees, including closing costs, to refinance.
The largest banks in the United States, including Wells
Fargo, Bank of America and JPMorgan Chase & Co., stand to
benefit from the extension, analysts said. HARP pays banks
incentives to refinance to qualified borrowers.
Greg McBride, a senior financial analyst at Bankrate.com in
North Palm Beach, Florida, said that the program was unlikely to
pull in as many borrowers as it had to date, although the number
would still be "sizable."
HARP loan volume picked up last year after FHFA made changes
in 2011 that made it easier for borrowers to switch to cheaper
loans, even if they have little to no equity in their homes.
The regulator scrapped a cap that had prohibited borrowers
whose mortgages exceeded 125 percent of their property's value
from refinancing loans. It also took steps to coax lenders to
participate in the program by removing technical barriers.