To facilitate refinancing for borrowers who are current on their mortgages but whose equity has eroded as home prices have fallen, the Administration’s Home Affordable Refinance Program, or HARP, provides streamlined refinancing for low- or no-equity mortgages if the borrowers meet certain qualifications and if their existing mortgages are already guaranteed by Fannie Mae or Freddie Mac.
So far, more than 800,000 borrowers have refinanced their mortgages through HARP. One question, however, is why more borrowers have not benefited from this program. We estimate that 4 million borrowers appear to meet the basic eligibility for HARP refinancing.1 Of course, some of these borrowers may be ineligible for reasons that we cannot observe, and others may be uninterested in refinancing.