Former Federal Reserve Chairman Ben Bernanke wanted to refinance his home. He filled out the paperwork and turned in the application. He was summarily denied.
Ex fed chair Ben Bernanke was turned down for a house refi:http://t.co/rlMpBkgb4t
— Scott Maze (@scottmaze) October 3, 2014
While addressing a conference of the National Investment Center for Seniors Housing and Care in Chicago yesterday, Mr. Bernanke admitted, “Just between the two of us, I recently tried to refinance my mortgage and I was unsuccessful in doing so.” As the room filled with laughter, he added, “I’m not making that up.”
Homeowners around the country are taking some consolation from his refinance woes.
Love this Bernanke story on getting negged on a mortgage – real world vs his made-up one
— Keith McCullough (@KeithMcCullough) October 3, 2014
The New York Post indicates that the former head of U.S. banks put down 20 percent on an $839,000 home in D.C., leaving him with a mortgage of about $672,000. Currently assessed at $885,000, it’s possible that Bernanke was refinancing to take advantage of low interest rates, or perhaps just take some cash out of the home.
The denial is a slap in the face to the man who, during his years at the Fed, eased up the country’s monetary policy and tried to stimulate the economy by buying back billions of mortgage debt from lenders. This helped bring mortgage rates down to historic lows, putting a huge amount of cash into homeowners’ hands as they scurried to refinance.
Why Ben Bernanke got turned down when he tried to refinance his house. http://t.co/epXBtdSuz3
— Timothy Noah (@TimothyNoah1) October 3, 2014
The denial doesn’t appear to be related to Bernanke’s credit-worthiness. He was paid $199,750 annually as head of the central bank, and picked up a quarter of a million dollars in his first public speaking gig in March, after leaving the Fed in January. He is also writing his memoirs, which reportedly landed him a $1 million book deal with W.W. Norton.
According to Bloomberg, the 60-year-old economist suggested banks were being too strict when deciding whether to lend to people.
“The housing area is one area where regulation has not yet got it right,” Bernanke said. “I think the tightness of mortgage credit, lending is still probably excessive.”
The numbers justify Bernanke’s concern. Overall mortgage lending fell 54 percent in the first half of 2014 in comparison to the year before, with loans for refinancing proving more difficult to obtain than those for new purchases. And the terms for would-be buyers may worsen: In July, Bernanke’s successor, Janet Yellen, said that the Fed may raise interest rates toward the end of the year.