Connecticut Mortgage Rates

Refinances have been responsible for almost 72 percent of mortgage loan originations from January through June of 2012. Many have named the Home Affordable Refinance Program (HARP) as the driver behind the numbers.

HARP activity increased 93.8 percent between the final quarter of 2011 and the first quarter of 2012 and then increased an additional 34.7 percent in the second quarter – an increase widely attributed to the new securitization option for refinances with a loan-to-value of more than 125 percent.

Refinancing under HARP 2.0 surged after Freddie Mac put into place a guarantor for lenders involved in the program. A Freddie Mac spokesman said, in an earlier interview, that the GSE had seen a significant pick up in activity of high LTV loans including loans of 125% or more. June 1 was the first day lenders could use to deliver the guarantor, making the loans easier to sell on the secondary market.

Previously, Open Access HARP 2.0’s could only be sold for cash.  Now, Open Access HARP 2’s can be delivered through the guarantor program. “That’s significant because most of the largest lenders’ systems are built around the guarantor option and previously Open Access HARP 2.0′s could only be delivered through the Cash option,” the spokesman said.

As a result, there came into existence two ways that a lender could deliver HARPs to Freddie Mac –cash or guarantor where the lenders could sell conventional fixed-rate mortgages in exchange for a Freddie Mortgage Backed Security that represented an undivided interest in the same mortgages, in other words, a Freddie guaranteed security for loans. The guaranty apparently helped to diminish lender fears over defaults under the refinancing program.

In Connecticut, there were 2,036 HARP refinances from January through July 2012 with 1,441 HARP refinances within the 80 percent to 105 percent LTV, 467 HARP refinances within the 105 percent to 125 percent LTV and 128 HARP refinances with an LTV greater than 125 percent.

HARP was launched in 2009 to help homeowners who are underwater on their mortgages refinance their home loans. The program has been tweaked several times since its inception as a result of criticism from both lenders and borrowers. In an earlier version of HARP, there was a 125 percent loan-to-value ceiling. That ceiling, which was proving to be a detriment to homeowners who wanted to refinance under the program, was eliminated this summer.

To qualify, a mortgage must be owned by Fannie Mae or Freddie Mac and it must have closed before June 1, 2009. An appraisal is not required under the program. In addition, you are not eligible if you missed any mortgage payments by more than 30 days in the last six months; however, after you make enough payments on time, you can become eligible.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard 0.7 to 1% origination fee.