HARP Share of Mortgage Refinancing Applications Up to 22%

The share of mortgage refinancing applications that fall under the government’s newly-enhanced HARP campaign jumped to 22 percent last week, from 18 percent the prior week, according to the Mortgage Bankers Association.
The Home Affordable Refinance Program made up close to a quarter of refinancing applications since it was ramped up in May to cover more borrowers, many of whom are “underwater” on their mortgages.
The program kicked into higher gear for those whose mortgages are owned or guaranteed by Fannie Mae or Freddie Mac, the government-subsidized enterprises that cover 60 percent of all mortgages.
So-called HARP 2.0 removes legal liabilities for lenders and eliminates the 125 percent loan-to-value cap on mortgages.
Overall, mortgage applications decreased 4.2 percent last week from one week earlier, according to data from the Mortgage Bankers Association for the week ending October 12, 2012.  This week’s results include an adjustment to account for the Columbus Day holiday.
The MBA’s Market Composite Index, a measure of mortgage loan applications volume for both purchases and refinancing, decreased 4.2 percent on a seasonally adjusted basis from one week earlier.
The separate Refinance Index decreased 5 percent from the previous week.
The seasonally-adjusted Purchase Index increased 1 percent from one week earlier. This is the highest Purchase Index observed in the survey since early June 2012.
The total refinance share of mortgage activity decreased to 82 percent of total applications from 83 percent the previous week.
The adjustable-rate mortgage (ARM) share of activity remained constant at 4 percent of total applications.
The average contract interest rate for 30-year fixed-rate mortgages, with conforming loan balances ($417,500 or less), increased to 3.57 percent from 3.56 percent, with points increasing to 0.44 from  0.39 (including the origination fee), for 80 percent loan-to-value ratio (LTV) loans.
The average contract interest rate for 30-year fixed-rate mortgages, with jumbo loan balances (greater than $417,500), increased to 3.81 percent from 3.74 percent, with points increasing to 0.42 from 0.40 (including the origination fee), for 80 percent LTV loans.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained constant at 3.34 percent, with points increasing to 0.82 from 0.71 (including the origination fee), for 80 percent LTV loans.

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