HARP 2.0 Drives Mortgage Refinancing to 3-Month High

A wave of refinancing borrowers seeking record low interest rates helped lift mortgage applications 3.8 percent from one week earlier, according to data from the Mortgage Bankers Association for the week ending May 18.
This is the third consecutive weekly increase in the association’s Refinance Index, which is at its highest level since February 10, 2012.
The Refinance Index increased 5.6 percent from the previous week.
A big factor in the refinancing wave is the Obama Administration’s enhanced Home Affordable Refinance Program, more commonly known as HARP 2.0. The program has been extended to eligible borrowers deeply “underwater” in their mortgages, owing more than the worth of their homes.
HARP 2.0, which has been up and running since March, has drawn half a million applications as of the last report by U.S. housing officials.
The HARP share of refinance applications was essentially unchanged over the week at 28 percent, according to the mortgage bankers.
“Mortgage rates again dipped to new record lows in the survey, which spurred more borrowers back into the refinance market,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “As a result, applications for refinance loans have increased for the third straight week and are at the highest level since February of this year.”
The overall Market Composite Index, a measure of mortgage loan application volume, increased 3.8 percent on a seasonally adjusted basis from one week earlier.
The refinance share of mortgage activity increased to 76.6 percent of total applications from 74.9 percent the previous week.
This is the highest refinance share since March 2, 2012.

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