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FHFA Extends HARP, Modifies Refinance Program

Phil Hall
Aug 17, 2017
The level of mortgage homeowners with tappable equity has reached a record peak, but tax code changes could have an impact on this market, according to a data analysis from Black Knight Inc.

The Federal Housing Finance Agency (FHFA) had modified the High LTV Streamlined Refinance program designed to help borrowers who are current on their mortgage but are unable to refinance because their loans have loan-to-value (LTV) ratios that exceed the maximum limits set by Fannie Mae and Freddie Mac.
 
The FHFA established an eligibility date which makes the program available for loans originated on or after Oct 1, 2017. With today’s announcement, Fannie Mae and Freddie Mac will modify the structure of future credit risk transfer (CRT) transactions to accommodate the High LTV Streamlined Refinance program by allowing the newly refinanced loans to return to the reference pools in place of loans that prepaid. According to the FHFA, this will help preserve credit loss protection on the loans without unwinding the protection paid for through CRT transactions.
 
The FHFA also announced that the HARP program will be extended through Dec. 31, 2018, in order to provide an additional refinance option for borrowers with high LTV ratios.
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