Volume of Borrowers Refinancing Continues to Increase

In March Fannie Mae said its refinancing volume totaled $77 billion which was an increase from the $41 billion reached in February.   Borrowers took advantage of lower mortgage rates and a new flexible refinancing program in the last month.   Fannie Mae has not had this level of activity since the refinancing boom that occurred back in 2003.   

As the number of eligible homeowners increase due to the Home Affordable Refinance Initiative, Fannie Mae is expected to have even more homeowners coming to refinance.  The Home Affordable Refinance Initiative allows Fannie Mae and Freddie Mac to use flexible underwriting to refinance mortgages they already own or guarantee.  Under this initiative borrowers who have loan-to-value ratios between 80% and 105% can refinance at current market rates.  Any existing insurance policy will be transferred to the new loan however beginning on April 4^th lenders and brokers can now use Fannie’s Desktop Underwriter to process those refinancing applications.