WASHINGTON Feb 10 More than 3 million
homeowners have been able to take advantage of a federal program
to lower their monthly mortgage payments, a U.S. regulator said
on Monday, showing the initiative has made progress even though
it still lags initial expectations.
The Home Affordable Refinance Program, or HARP, allows
borrowers with loans backed by Fannie Mae and Freddie Mac to cut
monthly payments by refinancing at lower interest rates even if
they have little to no equity in their homes.
"Three million HARP refinances is an important
accomplishment and represents real help to families and
communities still struggling as a result of the mortgage
crisis," said FHFA Director Mel Watt in a statement. "We are
continuing our efforts to make sure that those who can take
advantage of this program have the information they need to do
The Obama administration in 2009 rolled out the HARP
program. But at first, it predicted it would help as many as 5
million homeowners. However the program had limited impact in
its early days and was plagued by complaints from consumers
about lost paperwork and restrictive eligibility requirements.
HARP loan volume started to pick up about two years ago
after the FHFA made policy changes in 2011 that made it easier
for borrowers to switch to cheaper loans and lenders became more
willing to take part in the program. As a result, a bulk of HARP
participants refinanced in 2012 and 2013.
Now it is viewed as one of the more successful government
anti-foreclosure efforts. In 2013, FHFA extended the HARP
program deadline by two years to Dec. 31, 2015 and launched a
nationwide campaign to educate eligible homeowners on how to
Under the program, financial incentives are given to
mortgage companies to reduce loan payments to affordable levels.
Only borrowers with loans originated by May 31, 2009, can
qualify and some housing advocacy groups and lenders have
lobbied to widen HARP to cover more recent loans as well.
The Obama administration has said changing the eligibility
date is unnecessary, but the decision rests with FHFA Director
Mel Watt. Watt, who took office last month, has not yet rendered
The Obama administration has, however, voiced support for
expanding HARP to include loans that are not currently backed by
Fannie Mae and Freddie Mac. The effort would require action by
Fannie Mae and Freddie Mac have taken $187.5 billion in U.S.
aid since they were placed in a government conservatorship in
2008 after losses on investments in risky loans almost pushed
them to insolvency. As the housing market rebounded, the two
companies became profitable again, and they have returned $185.2
billion to the U.S. Treasury in the form of dividend payments
for the taxpayer support.