There’s a story going around that former Fed Chair Ben Bernanke couldn’t refinance his existing mortgage. It’s actually a true story and a statement he made while speaking at a conference last week. Financial publications and others picked up on the anecdote because Chairman Ben told the group that tightened mortgage guidelines may be too tight because even he couldn’t refinance. In light of the fact I personally haven’t seen his loan application he’s treated no differently than anyone else, including those applying for a VA mortgage.
Up until last March, Chairman Ben was gainfully employed as a member of the Federal Reserve. He got paychecks and he got W2 forms and all the things needed for a lender to verify both stable income and a two year history of employment. Since he no longer has those things it’s not time to feel sorry for him. He gets a six figure speaking fee plus a huge advance for a soon-to-be-written book. But for those who regularly read our blog, you know that’s not good enough.
You see, since Ben is now self-employed, he needs a two year history of self-employment with verifiable, consistent income. That’s a requirement for self-employed veterans who use a VA loan as well. Since there is no two year history and no validation of consistent income, Ben couldn’t qualify. Lenders have rules they must follow and that’s a biggie. So no, it wasn’t because of tighter guidelines, this rule has been in place for years.
