If two professors at Columbia Business School have anything to say about it, 30 million homeowners across the country would refinance their mortgages – and stabilize the lagging housing market in the process. The duo recently proposed the refi boom in a paper that aimed to prop up sagging home prices and accelerate job growth nationally.

The academes, R. Glenn Hubbard and Chris Mayer, come at the issue with the weight of their credentials. The former heads up Columbia Business as dean, while Mayer serves as professor of finance and economics as well as senior vice chair at the prestigious school. Hubbard also once chaired President George W. Bush’s Council of Economic Advisors and served as a deputy assistant secretary at the Treasury Department.

According to their paper, Hubbard and Mayer would ask the federal government to “take action to return mortgage rates to what they would otherwise be if the mortgage market were functioning normally,” as reflected by 10-year Treasury rates some 160 basis points below normal.

The two add that “policy makers would help address refinancing problems for owners with negative equity by engaging in sharing equity write-offs with lenders,” given that “the government and taxpayers have an enormously strong incentive to address the housing market… [with] the economy… unlikely to stop declining until the housing market stabilizes.”

And the meat of their suggestions?

Hubbard and Mayer recommend drawing down mortgage rates by some one percent for borrowers with federally insured loans who are in good standing. The refis, they say, would boost home prices by 10 percent to 17 percent nationally.

The authors contend that “lower mortgage rates would allow many homeowners to refinance their mortgages at more normal spreads and… improve affordability for potential new home buyers.”

The professors argue that their refi plan would inject $118 billion into the broader economy on an annual basis. Their stimulus plan would substantively size down negative equity, allowing 20 million Americans to reach more affordable rates with the refinance measures. Notably, only homeowners able to stay current on their payments could apply to participate in their refi plan.

“The typical borrower would save over $350 per month and many might be able to get out from under troubled and complicated negative amoritization and adjustable-rate mortgages,” the authors wrote.

The tradeoff? Bond holders would take a $121 billion hit as Uncle Sam wipes his hands of more government-backed mortgages.

Hubbard and Mayer nonetheless contend that the refi boost would help employ more people and sustain job mobility, thereby repairing inefficiencies in the economy at large and returning the cost of transactions in the housing market to normal.

In much of the paper, Hubbard and Mayer base their proposals on correlative research about economic growth in the housing sector, with the U.S., Japan, and other industrialized countries reflecting home price and sale strains in the wake of the financial crisis.

The professors conclude their policy plan with a call to action over chronically low house prices and banking-sector losses, the victims of skyrocketing mortgage market spreads.

“Whether the details of our proposal are adopted, or policymakers consider other options, it is imperative to restart the effective normal functioning of the mortgage market,” the two wrote. “Without strong policy action, the problems in the housing market will just get worse with appreciable consequences for all Americans.”