FHFA director: HARP can’t last forever

by 06 Mar 2015
By Meghan de St. Aubin

Director of the Federal Housing Finance Agency (FHFA) Melvin Watt told an audience at an outreach event that the FHFA would not continue to renew programs like the Home Affordable Refinance Program (HARP) without an end, even if the program is extended again before its December expiration date.

After the town hall meeting, many media outlets suggested there would be a HARP extension or expansion. During a Q&A with Watt at the Goldman Sachs Conference in Essex County, New Jersey, reporters were quick to ask what that meant for borrowers.

Watt explained that FHFA doesn’t like to leave any option off the table but that doesn’t mean FHFA is after an extension or expansion. He said anything is possible.

Watt also spoke about how why HARP was put into place—which targeted those who were burned during a meltdown period.

In 2008, when foreclosures soared, one in every 54 households were getting at least one filing notice. Nearly 3.2 million foreclosures were filed in 2007. In response to the crisis, loss migration programs were created. Watt said he believes these programs will not be needed as much anymore.

An estimated 3.2 borrowers have completed a HARP refinance since 2009 when it was introduced. The FHFA estimated there is as many as 800,000 U.S. borrowers who meet the general HARP eligibility requirements –  owe $50,000 or more on their mortgage and pay an interest rate that's at least 1.5% higher than current rates – have so far stayed on the sidelines.

According to the agency, more than 95,000 in New Jersey who have lowered their monthly mortgage payment by an average of $222 per month using HARP.

At an outreach event on Wednesday that was meant to target qualifying New Jersey households, only brought about 50 people. They expressed an immense amount of frustration with HARP saying servicers were unresponsive and they were confused about their options.

This was the FHFA’s fifth event to reach out to homeowners.

In October 2014, Watt was reminded of HARP ’s complexities, when he and other U.S. housing officials visited Detroit to promote the program. The group was confronted by about 150 protesters who said the program is hard to qualify for and doesn’t go far enough.


 

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