FEDERAL

2010 to 2012, but the attrition rate appears to be
stabilizing, as its 2012 rate was lower than its 2011
rate.
We concluded that human capital risks associated
with voluntary attrition rates within the enterprises’
capital market businesses had been adequately
managed and that no additional study on this topic
was needed. However, voluntary attrition rates are
not static, and an improving economy puts additional
pressure on the enterprises’ attrition rates as attractive
opportunities become available to their employees.
Therefore, we will continue to monitor FHFA’s
oversight of the enterprises’ human capital resources
and planning associated with human capital risk,
and we will initiate additional work on this topic as
warranted.
Home Affordable Refinance Program: A
Mid-Program Assessment (EVL-2013-006,
August 1, 2013)
FHFA, in coordination with Treasury, announced
HARP in March 2009. HARP is a streamlined
refinance program for loans owned or guaranteed by
Fannie Mae or Freddie Mac. It is designed to assist
borrowers who are current on their loans but have
not been able to refinance because they have little or
no equity in their homes. We conducted this program
evaluation to assess FHFA’s administration and
oversight of HARP.
When HARP was announced, Treasury estimated
that 4 to 5 million borrowers would have the
opportunity to refinance under the program. As
of September 2011, however, fewer than 1 million
of those borrowers had refinanced. Based on
consultations with lenders and feedback from
borrowers, FHFA directed the enterprises to modify
the program; this resulted in HARP 2.0, which is
scheduled to expire on December 31, 2015.
As a result of the initial HARP 2.0 program
modifications and subsequent changes made
throughout 2012 and 2013, HARP refinance volume
has substantially increased (see Figure 7, page 16). As
of March 2013, 2.4 million HARP refinances had
been completed. It is difficult, however, to project
how many HARP-eligible loans will ultimately be
refinanced. Several unknown variables, including
interest rates, lender participation, and borrowers’
willingness to refinance, make any estimate uncertain.
Additionally, challenges to the program’s success
remain. These challenges include educating borrowers
and encouraging their participation in the program.
FHFA is planning to address the challenges by
implementing a nationwide public education
campaign.
FHFA’s Initiative to Reduce the Enterprises’
Dominant Position in the Housing Finance
System by Raising Gradually Their Guarantee Fees
(EVL-2013-005, July 16, 2013)
FHFA has argued that federal financial support for
the enterprises over the years has permitted them
to set their guarantee fees—charged to protect
investors’ mortgage-backed securities (MBS)
against potential credit losses—at artificially low
levels. At such levels, the fees priced competitors
out of the conforming loan market and increased
the enterprises’ risks. The agency has directed the
enterprises to increase guarantee fees to encourage
greater private-sector investment in mortgage credit
risk, reduce the enterprises’ dominant position in
housing finance, and limit potential taxpayer losses.
We conducted this evaluation to: (1) analyze FHFA’s
initiative and (2) assess FHFA’s communication and
interaction with FHA, a government agency that
insures mortgages against credit losses, which recently
announced a cessation of its mortgage premium
increases.
Semiannual Report to the Congress • April 1, 2013–September 30, 2013 15