Even Ben Bernanke Can't Refinance His Own Mortgage

[kpete]

It turns out that one of these Americans having a hard time meeting the high bar required for refinancing is none other than former Federal Reserve Chairman Ben Bernanke. Here's what he had to say about his own experience, speaking at a conference in Chicago: “Just between the two of us,” he told moderator Mark Zandi of Moody’s Analytics Inc., “I recently tried to refinance my mortgage and I was unsuccessful in doing so. The housing area is one area where regulation has not yet got it right. I think the tightness of mortgage credit, lending is still probably excessive.”

Probably.

The New York Times's Neil Irwin explains how someone like Bernanke could get turned down: in a word, automation. “The problem probably boils down to this: Anybody who knows how the world works may know that Ben Bernanke has vast earning potential, and that he is as safe a credit risk as one could imagine. But he just changed jobs a few months ago. And in the thoroughly automated world of mortgage finance, having recently changed jobs makes you a steeper credit risk.”

So, if Bernanke got screwed, you can imagine how it is for ordinary Americans in today's notoriously volatile American labor market – the typical American stays in a job for 4.6 years, and people are changing and losing jobs with more frequency these days. If a former chairman of the most important economic institution in the world is seen as too risky, who isn't?



MORE:
http://www.alternet.org/economy/even-ben-bernanke-cant-refinance-his-own-mortgage

[leeroysphitz]

1. lol Aint that a bitch? n/t

[still_one]

2. This is a joke. The reason he couldn't get the loan is because he is NOT actively employed, even

though he has a book coming out and other revenue producing projects.

This is just a PR stunt to give the impression that he is "just one of the gang"

In other words, it is BS

[stevenleser]

3. What an odd take. No, it's not to give the impression he is one of the gang. Its to show how

hard it is to get a mortgage or mortgage refinancing and how those rules are inappropriately denying those loans to lots of people who should be getting them.

The entire point is that he is NOT one of the gang and if he is being denied there is a really big problem, otherwise the message wouldnt make sense.

[yeoman6987]

5. It should be hard

The last thing we need is another housing mess. Giving mortgages freely was what got us into the mess before. Back in the 70's everyone saved to buy a home. That was the big thing to do. Today everyone want to put zero down on a house. That is just crazy. A requirement should be 20 percent down for all mortgages. Refinance pay the closing costs and don't put it towards the mortgage. Have 6 months of mortgage payments in the bank. That is how it should be. To many are buying homes they clearly can't afford and it needs to stop.

[stevenleser]

6. There is a happy middle between giving out loans willy-nilly and denying them to folks

who can obviously pay. I get what you are saying and agree, but the reins have been too tight since 2009.

[SheilaT]

8. Worse than the zero down

mortgages, are the ones that are interest only. Every time I hear about one of those I wonder, What are they thinking? Do they not understand that the principal is staying the same? I realize that the logic behind interest only mortgages is that your home will always go up in value, as if we've never had a housing bubble before. Well we have had them before.

Heck, I thought -- I still think -- that I did pretty well when I bought my current home five years ago. I did put 20 percent down, and my interest rate is 4.75% and the payment is quite manageable. But several houses within two blocks, all essentially identical to mine, have sold within the last two years, and knowing what they sold for, I'd say that if I were to try to sell tomorrow, I'd get my original purchase price back. Lucky for me I'd walk away with some cash, thanks to the down payment and the fact that I am paying down the principal. But zero down payment and interest only? I'd owe money at closing.

[madville]

4. I refinanced easily last September

After just 11 months in my new job, got 3.6% for 15 years.

I wouldn't lend him any money either if he doesn't currently have a job or reliable revenue stream. You'd think someone like him could pay cash for a house in the first place.

[merrily]

7. I suspect he means he was checklisted, but got a mortgage anyway.

At a time when I had a very good paying job plus a lot of money in the bank (had just sold a home at a nice profit), I got refused a credit card because I was checklisted.

A letter to the bank (could have gone in or called) straightened it all out and I got the card plus profuse apologies. And, I suspect that the person who denied me got scolded soundly.

I suspect something along those lines happened to Bernanke. Either that, or he is flat out lying to make a point. In any event, one e call to Jamie Dimon or Warren Buffet or anyone like that would fix his alleged problem in a heartbeat.

Wonder why he even needs a mortgage?

[MFrohike]

9. A different take that I read

The "just between us" was a pretext to further erode mortgage lending standards. After all, Benny couldn't refinance, so it must be too strict!