The Federal Housing Finance Agency officially announced that the deadline for the Home Affordable Refinance Program has been extended to the end of 2016, matching the deadline of the Home Affordable Modification Program.
"Although the number of new borrowers entering these two programs continues to decline, in part because many eligible borrowers have already taken advantage of them and in part because of recovering house prices, lenders and servicers are continuing to approve new HAMP modifications and HARP refinances," FHFA Director Mel Watt said at the Greenlining Institute's 22nd Annual Economic Summit in Los Angeles.
"Extending HAMP and HARP through the end of 2016 will provide real relief for borrowers who continue to face challenges either paying their mortgage or refinancing their loan," Watt said.
So far, nearly 3.3 million borrowers have already taken advantage of HARP to reduce their monthly payments and obtain some financial relief.
Both HAMP and HARP were originally launched in 2009 to provide relief to borrowers by lowering their monthly payments and were set to expire on Dec. 31, 2013.
However, in June 2014, U.S. Treasury Secretary Jacob Lew announced several initiatives designed to spur the flailing housing market, including the extension of HAMP until Dec. 31, 2016.
"This innovative program has provided relief to homeowners across the country, including more than a million homeowners who have been able to permanently modify their mortgages through HAMP and save roughly $540 a month in mortgage payments," Lew said at the time of the announcement. "The Making Home Affordable Program is not just helping families keep their homes, it is giving families peace of mind."
Back in 2013, the Department of Housing and Urban Development teamed up with the Treasury Department to announce an extension of the Obama administration's Making Home Affordable Program through Dec. 31, 2015.
The then deadline was determined in coordination with the FHFAto align with extended deadlines for the Home Affordable Refinance Program and the Streamlined Modification Initiative for homeowners with loans owned or guaranteed by Fannie Mae and Freddie Mac.
As a result, after the second announcement of a HAMP extension in June 2014, it was rumored that HARP would be extended as well, since the FHFA did just that when both programs were extended for the first time in 2013.
Once again, talks quickly spread on the potential of a HARP extension after a town hall meeting on the Home Affordable Refinance Program in Newark, New Jersey, in March 2015.
Watt once again put an end to the rumors, explaining the next day that what he was saying is that the FHFA doesn't like to leave any option off the table, but that didn't mean that the agency was in any talks to pursue either an extension or expansion, just that anything was possible.
And possible just became reality.
While this will be the last time HAMP will ever be extended, there is still a chance that HARP could be revived.
"HAMP and HARP were never intended to be permanent programs. As a result, this will be the final extension that FHFA will make for the Enterprises' participation in HAMP and we anticipate that this will also be the final extension for HARP," Watt said.
"FHFA will use the time between now and the end of 2016 to consider how best to build on the lessons of HAMP for 2017 and beyond. In the meantime, we have determined that it is appropriate to maintain the Enterprises' streamlined modification program as part of their loss mitigation toolkit," he continued.
Last year, Watt started a nationwide public campaign to visit targeted cities with the highest number of in-the-money borrowers who have yet to take advantage of a HARP refinance in order to help spur participation.
According to an interactive map on the FHFA's website, there are more than 600,000 borrowers nationwide who would still benefit from HARP.