Even Ben Bernanke Can't Refinance His Own Mortgage

For millions of home-owning Americans, refinancing their home mortgages is a way to try to reduce interest and monthly payments, but doing so requires getting approval from a lender who will comb through your income history, credit scores, and every other financial detail of your life making refis difficult for many Americans to attain.


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?

Understand the importance of honest news ?

So do we.

The past year has been the most arduous of our lives. The Covid-19 pandemic continues to be catastrophic not only to our health - mental and physical - but also to the stability of millions of people. For all of us independent news organizations, it’s no exception.

We’ve covered everything thrown at us this past year and will continue to do so with your support. We’ve always understood the importance of calling out corruption, regardless of political affiliation.

We need your support in this difficult time. Every reader contribution, no matter the amount, makes a difference in allowing our newsroom to bring you the stories that matter, at a time when being informed is more important than ever. Invest with us.

Make a one-time contribution to Alternet All Access, or click here to become a subscriber. Thank you.

Click to donate by check.

DonateDonate by credit card
Donate by Paypal

Don't Sit on the Sidelines of History. Join Alternet All Access and Go Ad-Free. Support Honest Journalism.