Did you hear the one about the former Chairman of the Federal Reserve who tried to re-finance his mortgage and was turned down because his credit wasn't good enough? This isn't a joke, this is what actually happened to former Fed Chairman Ben Bernanke. Bernanke says he went down to the corner bank, applied for a new mortgage and was told that loan could not be approved.
Taking a look at Bernanke's financials, one has to wonder why he needs to refinance a mortgage--or why he even has a mortgage at the age of 60. He made $1.2-million in salary while serving as Fed Chair for six years. In addition, he makes a reported quarter-million dollars for each speaking engagement--including the one in Chicago where he admitted to the re-financing failure. And Bernanke received a reported million bucks in a book deal to publish his memoirs. So why can't he pay off the $672,000 he borrowed to re-finance his house FOR A SECOND TIME in 2011?
The conforming FHA loan limit for Washington DC--where Bernanke's house is located--is $625,000. That means in the past three years, Bernanke has failed to pay down his principal by at least $47,000 in order to qualify for the re-fi. So I'll ask again, someone who makes a quarter-million dollars just to speak for an hour or so and a million dollars just to write a single book can't pay off that amount either?
Or is it possible that Bernanke has such a poor credit score that he can't qualify for a loan? Lenders are currently looking for scores of 675 or above before they will approve a re-fi. That is one of the lessons learned from the bursting of the housing bubble: People who tend not to pay back other debts are likely not to pay back their mortgage either. Is it possible that the man who fully encouraged Government and citizen deficit spending is in way too far over his head as well?
Now Bernanke is taking none of the blame for his loan fiasco personally. In the same speech he blamed--of course--the lenders for being too tight with their money. Now if I'm not mistaken, Mr Bernanke was among the chorus of Washington hypocrites who at first admonished lenders for not giving mortgages to high-risk borrowers (denying them the "American Dream")--and then took those same banks and financial institutions to task for giving out high-risk mortgages and using derivatives to try and lessen the risk of default. Now, he says they are "too tight" for not taking on the same stupid risks again.
So the next time you wonder how we got to $18-trillion in Federal deficits, taxpayer losses on corporate bailouts and high numbers of foreclosures (despite Government efforts to float deadbeat owners as much as possible) just remember the personal financial situations of those who helped get us here.