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Evaluating the Benefits of a Streamlined Refinance Program

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.

JEL codes: R30, R38.
Keywords: government-sponsored enterprises, refinancing, business cycles.

Suggested citation: Gerardi, Kristopher, Lara Loewenstein, and Paul Willen. 2020. ”Evaluating the Benefits of a Streamlined Refinance Program. ”Federal Reserve Bank of Cleveland, Working Paper No. 20-21.

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