About 6.6 percent of conforming first loans have loan-to-value ratios above the new ceiling for the Obama administration’s Home Affordable Refinance Program, compared with 16.5 percent under the program’s old guidelines, according to an analysis by Zillow.

Zillow said that under the old 105 percent LTV ceiling, 14.6 million homeowners with mortgages might have qualified for the program. Raising the ceiling to 125 percent means another 5.6 million homeowners are potentially eligible for the program, Zillow said.

Only borrowers whose mortgages are currently owned or guaranteed by Fannie Mae or Freddie Mac qualify for the refinance program (a separate Home Affordable Modification Program is not restricted to loans owned by Fannie and Freddie).

There’s no telling how many homeowners who fall within the Home Affordable Refinance Program’s 125 percent LTV ceiling would be excluded because their mortgages aren’t backed by Fannie or Freddie, or because they don’t meet other eligibility criteria.

But those with LTVs above 125 percent would automatically be excluded, and Zillow’s calculations give some idea of the potential magnitude of the change to the program’s guidelines, announced Wednesday (see story).

In a blog post, Zillow reported that 14.6 million borrowers, or 26 percent of U.S. homeowners with mortgages, have loan-to-value ratios between 80 percent and 105 percent, and that 36 percent have LTVs between 80 percent and 125 percent.

Homeowners with LTVs less than 80 percent have a large enough equity stake in their home that they could refinance outside of the Home Affordable program. The question then becomes how many homeowners have LTVs that exceed the new ceiling. A Zillow spokeswoman told Inman News that 6.6 percent of homeowners with mortgages have LTVs above 125 percent, or about 3.7 million borrowers.

When the Home Affordable Refinance Program was announced in February, the Obama administration hoped that as many as 4 million homeowners would be able to take advantage of it.

Federal regulators said last month that 80,000 refinancings had been completed under the program to date, and that only 20,000 of those had LTVs greater than 80 percent, Bloomberg reported.


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