Econintersect: CoreLogic states that even with the very low mortgage rate environment, homeowners are not taking advantage of (or prevented from taking advantage of) lower interest rates.
Part of the slow recovery from the Great Recession is due to the housing market. Giving homeowners access to low mortgage rates would reduce monthly consumer outlays for housing, and theoretically allow spending in other parts of the economy. The government's Home Affordable Modification Program (HARP) has not been very successful as the above graph illustrates in reducing mortgage interest rates.
To be eligible for HARP:
- The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
- The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
- The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
- The current loan-to-value (LTV) ratio must be greater than 80%.
- The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.
CoreLogic reported that approximately 2.4 million borrowers are HARP eligible, but have not taken advantage. In addition, they see an additional 1 million could be eligible if the origination date restriction is lifted.