Author Topic: Ben Bernanke can't refinance.  (Read 4605 times)

kite

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Ben Bernanke can't refinance.
« on: October 03, 2014, 06:56:22 AM »
All over the news today is word that the former Fed chairman can't refinance his mortgage and how that is indicative of a problem with automation of lending standards.  Since leaving the government,  he has no steady income,  even though his speaking fees are quite high.
It's a bit humorous, but personally, I'd have to agree with the refi criteria that turned him down.   Banks aren't allowed to discriminate on the basis of age, and yet there is something sad, IMO, about someone who had only around 25% equity in their primary residence at age 61. 

Thoughts?

Jack

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Re: Ben Bernanke can't refinance.
« Reply #1 on: October 03, 2014, 07:28:27 AM »
[T]here is something sad, IMO, about someone who had only around 25% equity in their primary residence at age 61. 

In most cases, I agree. However, when the 61-year-old could pay off his house but chooses not to because he can get a better return on investment elsewhere, it's perfectly reasonable. Given that he's the damn former Fed chairman, I would hope that's the case!

gimp

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Re: Ben Bernanke can't refinance.
« Reply #2 on: October 03, 2014, 01:10:01 PM »
He's not an idiot. He gets 200k for a speech. He has plenty of money and prefers to not tie it up in a house. Furthermore, he's clearly using himself as an example of an issue -- I'm sure if he really wanted to refinance, he could.

Shor

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Re: Ben Bernanke can't refinance.
« Reply #3 on: October 03, 2014, 04:30:55 PM »
He's not an idiot. He gets 200k for a speech. He has plenty of money and prefers to not tie it up in a house. Furthermore, he's clearly using himself as an example of an issue -- I'm sure if he really wanted to refinance, he could.
I agree, if he wanted to, he probably has the right numbers to call up and lean on people in to getting what he wants.

On the other hand, couldn't he show his available equity as 'proof enough' that he can afford whatever the new terms are? Why should the mortgage terms be based on future earnings when his current assets would plenty cover it? Unless they don't?
Is it a case of a bad system, or are we missing a crucial piece of info here?

gimp

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Re: Ben Bernanke can't refinance.
« Reply #4 on: October 03, 2014, 04:51:46 PM »
Unless the man is a massive idiot in regards to his personal finances - which is unlikely, since he is probably quite a bit smarter than any of us, and knows a fair bit about money - I would imagine that he chose to use himself as an anecdote of how ridiculous certain requirements to refinance are. Perhaps he couldn't refi using existing assets as proof, perhaps he wanted to only use his income but the bank wouldn't accept 1099 income, perhaps something else. It's a curated example, which will of course be politicized and mocked, but that's what happens when you have anything to do with the government today (especially a part of the government so poorly understood, especially if you're a public face, especially if you're in charge of things, especially if your decisions affect many people, especially if you were in charge of the fed during a big downturn).

Just take it at face value: he wanted to use himself as an anecdote of how ridiculous some requirements are at at least one bank. That's it.

This thread is just another example of people here acting smugly superior about things they don't understand. We desire for our disliked public officials above everything else to show themselves to be hypocrites, so we may cast stones at their glass houses and feel better about our own. Fuck off.

beltim

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Re: Ben Bernanke can't refinance.
« Reply #5 on: October 03, 2014, 04:55:43 PM »
This thread is just another example of people here acting smugly superior about things they don't understand. We desire for our disliked public officials above everything else to show themselves to be hypocrites, so we may cast stones at their glass houses and feel better about our own. Fuck off.

+1

Acipenser

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Re: Ben Bernanke can't refinance.
« Reply #6 on: October 10, 2014, 02:31:54 PM »
Unless the man is a massive idiot in regards to his personal finances - which is unlikely, since he is probably quite a bit smarter than any of us, and knows a fair bit about money - I would imagine that he chose to use himself as an anecdote of how ridiculous certain requirements to refinance are. Perhaps he couldn't refi using existing assets as proof, perhaps he wanted to only use his income but the bank wouldn't accept 1099 income, perhaps something else. It's a curated example, which will of course be politicized and mocked, but that's what happens when you have anything to do with the government today (especially a part of the government so poorly understood, especially if you're a public face, especially if you're in charge of things, especially if your decisions affect many people, especially if you were in charge of the fed during a big downturn).

Just take it at face value: he wanted to use himself as an anecdote of how ridiculous some requirements are at at least one bank. That's it.

This thread is just another example of people here acting smugly superior about things they don't understand. We desire for our disliked public officials above everything else to show themselves to be hypocrites, so we may cast stones at their glass houses and feel better about our own. Fuck off.

Agreed. He should be praised for being willing to be the butt of all the jokes and criticism, in order to make a point. Takes cojones.

Numbers Man

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Re: Ben Bernanke can't refinance.
« Reply #7 on: October 10, 2014, 02:51:40 PM »
Bernanke is pointing out how broken the mortgage industry is. Lenders seem to only be able to lend based on a FICO score, current income (excluding bonuses that are part of the recurring compensation). Lenders don't give a crap about your Balance Sheet because they are just checklisting the FannieMae requirements. If they looked at Bernanke's Balance Sheet they would have made the loan.

orbix

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Re: Ben Bernanke can't refinance.
« Reply #8 on: October 14, 2014, 10:59:22 AM »
This is a similar problem to my parents, who *could* have bought their previous house in cash, but wanted a partial mortgage so that the rest of the cash could be used elsewhere on more lucrative investments. They were turned down several times until they finally got someone at the bank to look at the balance sheet and realize that there wasn't a chance in the world they wouldn't be good for the debt...

That said, if you're going to be outside the norm on just about anything, you can usually expect to have to explain a bit. I'm guessing Bernanke could have (and likely did) talked to other lenders until he found one that was willing to look a bit harder at his situation.

Forcus

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Re: Ben Bernanke can't refinance.
« Reply #9 on: October 15, 2014, 04:28:45 PM »
Unless the man is a massive idiot in regards to his personal finances - which is unlikely, since he is probably quite a bit smarter than any of us, and knows a fair bit about money - I would imagine that he chose to use himself as an anecdote of how ridiculous certain requirements to refinance are. Perhaps he couldn't refi using existing assets as proof, perhaps he wanted to only use his income but the bank wouldn't accept 1099 income, perhaps something else. It's a curated example, which will of course be politicized and mocked, but that's what happens when you have anything to do with the government today (especially a part of the government so poorly understood, especially if you're a public face, especially if you're in charge of things, especially if your decisions affect many people, especially if you were in charge of the fed during a big downturn).

Just take it at face value: he wanted to use himself as an anecdote of how ridiculous some requirements are at at least one bank. That's it.

This thread is just another example of people here acting smugly superior about things they don't understand. We desire for our disliked public officials above everything else to show themselves to be hypocrites, so we may cast stones at their glass houses and feel better about our own. Fuck off.

I think what you said is true, the problem is it was blasted on all the news outlets as "even Ben can't borrow, so we're all screwed" when the truth was quite different. I got sucked in, read the story, realized something wasn't quite right, then researched how it came about. Almost fell for it and was preparing to get all sullen, stay in bed for 3 days, crying and eating beef jerky.