Lending in the High Tech Age

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the latest ORIGINATION Or ig i nat ion Survey: Half of HARP Refinances Were Denied Previously Results from loanDepot demonstrates just how much HARP 2.0 did to increase eligibility. Report: One in Seven Markets Fully Recovered a na ly t ic s refinanced through the company between Q1 2012 and Q 3 2013. According to loanDepot's findings, 51 percent of those recent HARP borrowers were turned down while the program was in its first iteration. Out of those, more than half had been turned down multiple times. When asked why they were denied, most respondents said their home was too far underwater at the time (57 percent). Seventeen percent said their credit was too poor. who could reduce their monthly payments with a refinance through the program. "Many underwater HARPeligible homeowners have been turned down before, and they now assume they can't get help," said Jim Svinth, chief economist for loanDepot. "Requirements have changed, making it possible for loanDepot to give financial relief to even more homeowners." In other findings, loanDepot's survey found 87 percent of borrowers who refinanced through HARP are saving $1,200 or more a year after refinancing. Twelve percent reported savings of $6,000 or more per year. s e r v ic i ng D emonstrating the extent to which eligibility has opened up in the last year, a new survey from shows more than half of homeowners who recently refinanced through the Home Affordable Refinance Program (HARP) had been turned down for the program previously. For its survey, loanDepot talked to a random sampling of 253 HARP borrowers who Of the 49 percent who hadn't previously tried to refinance, many said they were not aware of HARP, while others weren't confident that they would qualify. Reforms announced in December 2011 removed many restrictions from the program, granting access to previously ineligible homeowners. The expanded HARP 2.0 removed the ceiling on eligible loan-to-value ratios—welcome news for the most severely underwater borrowers. According to estimates from the Federal Housing Finance Agency, there are up to 2 million HARP-eligible borrowers who have little to no home equity and Baton Rouge, LA se c on da r y m a r k e t NAHB's newest index shows how far housing has come and how much ground is left to make up. A new index from the National Association of Home Builders (NAHB) and First American suggests that about one in seven housing markets has returned to or surpassed its pre-recessionary levels of activity. NAHB's Leading Market Index (LMI) measures employment growth data from the Bureau of Labor Statistics, home price appreciation data from Freddie Mac, and single-family housing permit growth from the Census Bureau to measure overall improvements in each market. While the LMI helps illustrate how far the recovery has come in the last several years, NAHB chairman Rick Judson said it also measures "how much further it has to go as we continue to face some significant headwinds in terms of credit availability, rising costs for lots and labor, and uncertainties regarding Washington policymaking." According to the association, the index registered a score of 0.85 nationwide, indicating that the national housing market is running at 85 percent of normal activity. Of the nearly 350 metro markets examined, 52 have reported levels of activity at least equal to those before the recession hit. What's more, housing markets in 118 metros scored 0.9 or higher—"a very encouraging sign of things to come," said Kurt Pfotenhauer, vice chairman of First American Title Insurance Co. Baton Rouge, Louisiana, ranked highest on the list of improved major markets, posting an index score of—41 percent better than its last normal market level. Other major metros reporting growth include Honolulu, Hawaii; Oklahoma City, Oklahoma; Harrisburg, Pennsylvania; and Austin and Houston, Texas. Widening the scope to include smaller metros, both Odessa and Midland, Texas, scored 2.0 or better, meaning their markets have doubled in strength compared to pre-recession years. Also topping the list of smaller metros are Casper, Wyoming; Bismarck, North Dakota; and Florence, Alabama. "Smaller metros are leading the way to a housing recovery, accounting for 43 of the top 50 markets on the current LMI," said NAHB chief economist David Crowe. "This is very much in keeping with the results of our previous index for improving markets and is an indication of the extent to which local economic conditions dictate the strength of individual housing markets." The M Report | 37

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