We study how employment documentation requirements and out-of-pocket closing costs constrain mortgage refinancing … study their effects on refinancing, we exploit an FHA policy change that excluded unemployed borrowers from refinancing and … increased others' out-of-pocket costs substantially. These changes dramatically reduced refinancing rates, particularly among …

reduced recent refinancing in states with depressed property markets. We also point to the many ways in which the reduction in … refinancing may have inflicted additional damage in these already recession-hit states. Finally, we show that relatively minor …