Evaluating the Benefits of a Streamlined Refinance Program

24 Pages Posted: 8 Jul 2020

See all articles by Kristopher Gerardi

Kristopher Gerardi

Federal Reserve Bank of Atlanta

Lara Loewenstein

Federal Reserve Bank of Boston

Paul Willen

Federal Reserve Bank of Boston - Research Department; National Bureau of Economic Research (NBER)

Date Written: July 8, 2020

Abstract

Mortgage borrowers who have experienced employment disruptions as a result of the COVID-19 pandemic are unable to refinance their loans to take advantage of historically low market rates. In this article, we analyze the effects of a streamlined refinance (“refi”) program for government-insured loans that would allow borrowers to refinance without needing to document employment or income. In addition, we consider a cash-out component that would allow borrowers to extract some of the substantial housing equity that many have accumulated in recent years.

Keywords: government-sponsored enterprises, refinancing, business cycles

JEL Classification: R30, R38

Suggested Citation

Gerardi, Kristopher S. and Loewenstein, Lara and Willen, Paul S., Evaluating the Benefits of a Streamlined Refinance Program (July 8, 2020). FRB of Cleveland Working Paper No. 20-21, Available at SSRN: https://ssrn.com/abstract=3646332

Kristopher S. Gerardi

Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States
404-498-8561 (Phone)

HOME PAGE: http://sites.google.com/site/kristophergerardishomepage/

Lara Loewenstein (Contact Author)

Federal Reserve Bank of Boston ( email )

600 Atlantic Avenue
Boston, MA 02210
United States

Paul S. Willen

Federal Reserve Bank of Boston - Research Department ( email )

600 Atlantic Avenue
Boston, MA 02210
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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