More than a quarter of Tower Federal Credit Union's refinance applications since March have been for loans through the latest version of the Home Affordable Refinance Program, the credit union has reported.
“The intention of HARP was to help people who are current on their mortgage payments, but do not qualify for a traditional refinance due to a significant loss in their home’s value, or who have little or no equity, to refinance and take advantage of lower interest rates,” said Barry Stricklin, vice president of real estate lending at the $2.5 billion Tower FCU in Laurel, Md.
Borrowers may be eligible for HARP if their loan was sold to Fannie Mae or Freddie Mac before June 1, 2009, the credit union said.
The credit union laid the ground for member interest in the HARP loans by alerting members to the program and its possibilities.
“We wanted to take a proactive approach,” said Tower President/CEO Martin Breland. “We assumed many of our members were not aware of the new program and didn’t know that they may qualify for a refinance even though their homes had lost value.”
The 125,000-member credit union said it has amassed more than $70 million in either pending or closed HARP program loans since March of the year.
The impact on some members’ lives has been significant, the credit union said, with the average member using the loans saving $425 per month, or more than $5,000 annually, and some as much as $700 per month.