The Home Affordable Refinance Program has helped countless borrowers since going into effect in 2009, and has continued to provide assistance so far in 2012.

The Federal Housing Finance Agency reports that 19 percent of the borrowers with mortgages backed by Fannie Mae or Freddie Mac that utilized HARP were able to restructure their loans into shorter terms. This is nearly double the rate seen in the entirety of 2011. In May, HARP accounted for 20 percent of all refinancing activity, according to a report from the Mortgage Bankers Association, which is the highest this share has been in the history of the program.  

"These numbers show HARP 2.0 is accomplishing the goals set forth - to provide relief to borrowers who might otherwise be unable to refinance due to house price declines," said FHFA acting director Edward DeMarco. "Borrowers with Fannie Mae- or Freddie Mac-backed loans who are current on their underwater mortgages are taking advantage of the opportunity offered by HARP 2.0."

By taking action to shorten the timeline of their mortgages, these borrowers can hope to pay off their loans faster and strengthen their equity.

Underwater homeowners still struggle

Negative equity continues to be a major problem for the housing market. Since these households owe more on their loans than their properties are currently worth, many of them are unable to sell their homes since it would mean taking a loss on their investment. In addition, underwater borrowers also have limited options when it comes to conventional refinances, and therefore required the services of programs such as HARP.

It was found that many of these borrowers who obtained their mortgage rates at the housing market's peak had mortgage rates ranging between 6 and 7 percent. Through HARP, depending on their personal financial situation, they have the option to take on more current rates, which have been below 4 percent for all but one week so far in 2012.

However, this major increase in HARP activity is believed to be the result of the FHFA expanding the program by lowering qualification standards. Specifically, the agency which oversees mortgage activity at Fannie and Freddie, removed loan-to-value limitations as well as certain appraisal requirements and upfront fees borrower were previously forced to pay to use the program.