Taking advantage of the low interest rate environment,
Regions Financial Corp.
) helped around 6,000 homeowners refinance their mortgages under
the government's Home Affordable Refinance Program (HARP). The
program is scheduled to continue till December 2013.
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Under the HARP initiative, homeowners having their loans owned by
) are eligible to refinance these at lower interest rates despite
considerable reduction in the values of such loans. Many homeowners
were not able to meet the criteria under the previous edition of
HARP, which was introduced in 2009, since the loans were not
allowed to be more than 125% of the value of the property.
HARP facilitates ineligible homeowners to use other refinancing
benefits. Also, it provides uncomplicated paperwork for
loan-processing and opportunities to make the refinancing process
easier with an existing loan-servicer or lender. Moreover, the
program reduced fees and removed the risk-based fees for short-term
Earlier this month, Regions refinanced more than $1 billion worth
of loans, thus meeting its refinancing target for this year.
Further, the bank introduced two new operations centers along with
additional staff to help accelerate the entire process.
While almost 60% of HARP refinances were done by Regions from March
to August 2012 for existing customers, the rest were made for
non-customers. Moreover, a customer refinancing through Regions
will be able to save about $285 monthly.
Regions' refinancing activities enhanced its mortgage revenues by
17% sequentially. Further, its mortgage production for the
second quarter was $2.1 billion, recording a 28% hike from the
prior quarter. Regions' peers include
Middleburg Financial Corporation
ECB Bancorp Inc.
Regions retains a Zacks #2 Rank, which translates into a short-term
Buy rating. However, considering the fundamentals, we maintain a
long-term Neutral recommendation on the stock.