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Working Paper

Evaluating the Benefits of a Streamlined Refinance Program

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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.
Topics
Lending and access to credit
07.08.2020ISSN 2573-7953 WP 20-21DOI 10.26509/frbc-wp-202021
Keywords government-sponsored enterprises, refinancing, business cycles
JEL Classification Codes R30, R38

Working Papers of the Federal Reserve Bank of Cleveland are preliminary materials circulated to stimulate discussion and critical comment on research in progress. They may not have been subject to the formal editorial review accorded official Federal Reserve Bank of Cleveland publications. The views expressed in this paper are those of the authors and do not represent the views of the Federal Reserve Bank of Cleveland or the Federal Reserve System.

Suggested Citation

Gerardi, Kristopher, Lara Loewenstein, and Paul S. Willen. 2020. “Evaluating the Benefits of a Streamlined Refinance Program.” Federal Reserve Bank of Cleveland, Working Paper No. 20-21. https://doi.org/10.26509/frbc-wp-202021