Economic Stimulus Through Refinancing
How the federal government could stimulate the economy while helping middle-class households without a cost to taxpayers—and possibly benefiting them.
Now Is the Time to Consider Widespread Refinancing
By Alan Boyce, R. Glenn Hubbard, Christopher Mayer, and James Witkin
- Proposal: Streamlined Refinancings for up to 13 Million Borrowers (draft 6/13/2012, PDF)
- Comprehensive Analytical Model: The Boyce/Hubbard/Mayer/Witkin Plan(6/12/2012, Excel)
- Estimates: Benefits from Refinancing by State and Congressional District (1/31/2013, Excel) Note: The above calculations consider only GSE-guaranteed mortgages and should not be directly compared to prior analysis utilizing the full universe of outstanding GSE/FHA/VA mortgages.
- Estimates: Impact of a 2009 Streamlined Refinancing Plan (10/26/12, Excel)
- Alan Boyce addresses questions about Freddie Mac's trading in inverse IO floaters (Zero Hedge, 2/5/2012)
- Freddie Mac shows refinancings reduce default by 54% (12/1/12)
- CBO Analysis Strengthens Case for Major Refinancing Program (9/7/2011, PDF)
With the 10-year Treasury rate near its lowest point since the Great Depression, there is a new opportunity for the federal government to implement a new economic stimulus program . . . helping over 12 million borrowers with government guaranteed mortgages at today's record-low rates. Under our plan, homeowners could save more than $25 billion per year in interest payments at no cost to the US Treasury. More than one-half of the savings would go to middle-class households whose mortgages started at less than $200,000.