WASHINGTON An ad campaign begun by the Federal Housing Finance Agency may come too late to boost refinancings by underwater borrowers with loans owned by Fannie Mae and Freddie Mac.
The agency unveiled the campaign, which features Mike Aubrey, the start of HGTV's "Power Broker," in late September. Officials hope the public service announcements and outreach efforts by mortgage companies will encourage more borrowers to take advantage of the Home Affordable Refinance Program.
The campaign began in local markets within the past couple weeks, and will air on national networks later this month.
But the latest data indicates that Harp refinances are steeply declining, falling in November for the fifth consecutive month. Just 38,732 Harp refinances were completed in November, down 16.5% from the month prior and 70% from a year earlier.
Laurie Goodman, a senior fellow at the Urban Institute, said it will be hard for Harp to get a second wind, noting that borrowers who didn't take advantage of the program when interest rates were at 3.5% are unlikely to refinance at 4.5%.
Goodman, a former Amherst Securities Group managing director, added that there is a lot of inertia among borrowers who have not refinanced.
The Urban Institute estimates there are 872,400 homeowners who are current on their mortgage and could still benefit from a Harp refinancing. But lenders will be lucky to get a significant portion of that pool to refinance.
"Refinances have tailed off because of burnout and higher rates. The basic trend is in place," Goodman said.
Since 2009, lenders and servicers have refinanced 18.7 million government-sponsored enterprise loans, including 3 million Harp refinances.
"This program by all standards has been a huge success," Goodman said.
The Harp program got off to a slow start in 2009. In late 2011 the FHFA streamlined the program and it took off.
Last April, the GSE regulator extended the program to December 31, 2015. Lenders and servicers will have nearly two more years to refinance GSE borrowers with loan-to-value ratios above 80%.
In November, 38,732 Harp refis were completed, including 7,610 homeowners with loan-to-value ratios above 105% to 125% and another 5,430 borrowers with LTVs above 125%.