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Evaluating the Benefits of a Streamlined Refinance Program


  • Kristopher S. Gerardi
  • Lara Loewenstein
  • Paul S. Willen


Mortgage borrowers who have experienced employment disruptions as a result of theCOVID-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 amount of housing equity that many have accumulated in recent years.

Suggested Citation

  • Kristopher S. Gerardi & Lara Loewenstein & Paul S. Willen, 2020. "Evaluating the Benefits of a Streamlined Refinance Program," Policy Hub 2020-8, Federal Reserve Bank of Atlanta.
  • Handle: RePEc:fip:a00001:89431
    DOI: 10.29338/ph2020-08

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    References listed on IDEAS

    1. Kristopher Gerardi & Kyle F. Herkenhoff & Lee E. Ohanian & Paul S. Willen, 2018. "Can’t Pay or Won’t Pay? Unemployment, Negative Equity, and Strategic Default," Review of Financial Studies, Society for Financial Studies, vol. 31(3), pages 1098-1131.
    2. Andreas Fuster & Paul S. Willen, 2017. "Payment Size, Negative Equity, and Mortgage Default," American Economic Journal: Economic Policy, American Economic Association, vol. 9(4), pages 167-191, November.
    3. Kadiri Karamon & Douglas McManus & Jun Zhu, 2017. "Refinance and Mortgage Default: A Regression Discontinuity Analysis of HARP’s Impact on Default Rates," The Journal of Real Estate Finance and Economics, Springer, vol. 55(4), pages 457-475, November.
    4. Marco Di Maggio & Amir Kermani & Benjamin J. Keys & Tomasz Piskorski & Rodney Ramcharan & Amit Seru & Vincent Yao, 2017. "Interest Rate Pass-Through: Mortgage Rates, Household Consumption, and Voluntary Deleveraging," American Economic Review, American Economic Association, vol. 107(11), pages 3550-3588, November.
    5. Sumit Agarwal & Gene Amromin & Souphala Chomsisengphet & Tim Landvoigt & Tomasz Piskorski & Amit Seru & Vincent Yao, 2015. "Mortgage Refinancing, Consumer Spending, and Competition: Evidence from the Home Affordable Refinancing Program," NBER Working Papers 21512, National Bureau of Economic Research, Inc.
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    More about this item


    mortgage; refinance; cash -out; COVID-1;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy


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