Watt Announces One-Year Extensions Ford HARP and HAMP
May 8, 2015
The government’s Home Affordable Refinance Program (HARP) and Home Affordable Modification
Program (HAMP) will be extended until the end of 2016, according to an announcement from FHFA
Director Mel Watt on Friday.
Speaking at the Greenlining Institute 22nd Annual Economic Summit, Watt announced a one-year
extension of the government’s two affordable housing programs, which began in 2009 in response to the
housing crisis. Both programs were set to expire at the end of 2015.
“Since HAMP and HARP were first launched in 2009, these programs have provided critically important
relief for many borrowers by allowing them to lower their monthly payments and, as a result, have
prevented many foreclosures,” Watt said. “HAMP provides modifications that allow borrowers significant
payment reductions that are tied to their income. This gives borrowers a more stable, affordable monthly
payment and improves performance rates. The HARP program allows borrowers, including those who are
underwater on their mortgage and who are regularly making their mortgage payments, to refinance their
loans to take advantage of historically low interest rates.”
HARP is a program intended to help save money by lowering monthly payments for borrowers who are
underwater but are regularly making mortgage payments, while HAMP is targeted toward borrowers who
are delinquent and possibly facing foreclosure by providing them a modification with significantly reduced
monthly payments tied to their income.
The participation rates for both programs have on the decline, partly because many borrowers are
already participating in one program or the other, and partly because of recovering house prices, Watt
said, but lenders and sevicers continue to approve modifications through HAMP and refinances through
“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.
Watt said that this will be the final extension for FHFA’s participation in HAMP and he anticipates that this
will be the final extension for HARP, adding that neither program was intended to be permanent.