Residential home loan refinancings through the government's Home Affordable Refinance Program (HARP) have caused increased revenue for mortgage servicing firms due to changes in the program's qualifications, reported the Wall Street Journal.
Before the standards were changed borrowers, who owed more than 125 percent on their home loans were not eligible for HARP refinancing. The Federal Housing Finance Agency recently changed its standards to remove the 125 percent limit and made other tweaks that increased eligibility.
These changes are causing an increase in the number of HARP refinances, which have been accounting for approximately 30 percent of all home loan refinances in the weeks, according to the Mortgage Bankers Association.
Because of that higher volume, the Journal reports that data compiled by Nomura Holdings finds that servicers could see $12 billion in revenue from the program.
HARP's increased eligibility levels for mortgage borrowers are greatly helping to improve consumer credit scores and personal credit conditions, as a greater number of borrowers are lowering their monthly mortgage payments.