Posted on 10/03/2014 12:28:19 PM PDT by right-wing agnostic
Just how inflexible are lending standards these days? Ben Bernanke said at a conference Thursday that he’d been unable recently to refinance his mortgage.
“It’s entirely possible” that lenders “may have gone a little bit too far on mortgage credit conditions,” he said at a conference in Chicago, according to Bloomberg News.
But wait. Surely a man with high income, lots of equity in his home, good credit and a solid net worth must be able to get a mortgage. Mr. Bernanke stepped down as the chairman of the Federal Reserve in January and joined the Brookings Institution as a “distinguished fellow in residence.” He’s also writing a memoir and giving speeches (reportedly for hefty speaking fees).
The broader point Mr. Bernanke was making isn’t that credit standards on their own are unnecessarily restrictive. Borrowers who can make a 3.5% down payment with a 650-ish credit score and two years of stable income can qualify for a loan backed by the Federal Housing Administration.
Instead, the issue is one of nuance—or the lack thereof. Lenders have grown to rely heavily on automated underwriting systems and the requisite documentation of borrower incomes, the sources of their down-payment funds and anything else that’s fed into those computers to determine whether a borrower qualifies for a loan.
(Excerpt) Read more at blogs.wsj.com ...
I’ll wait to hear just a little more of the backstory on this one.
Like for example, what is the amount he is trying to “refinance.”
maybe when the bank asked how he planned to repay the loan, he said that he’d print some money
Maybe he can call Chris Dodd and get a below market rate at Countywide....oops
The guy makes millions of dollars per year. Why can’t he just pay cash for the house????
Because that wouldn’t provide a talking point on softening credit underwriting standards again, silly.
Nope.
A good many friends who are virtually debt free and pay their bills on time can’t get a loan or refinance.
The interest rate they are looking for is very low.
Contrast that the Sub Prime market where being late for bills isn’t an issue.
The banks and financing companies want sub prime. Way higher interest rates and they factor in the risk but, the gamble seems to paying off.
Yeah, because having to prove you didn’t get your down payment from selling crack on the street corner is a true PITA.
Are lenders asking questions about where you got money for a down payment?
Are these asking for proof that you saved the money?
Do they ask such questions if you do an all cash deal?
I haven’t bought a house or had to apply for a mortgage in decades, so I’m not familiar with procedures nowadays.
“It’s entirely possible” that lenders “may have gone a little bit too far on mortgage credit conditions,”
ya think?
Dive right in - the water’s fine as long as you’re already prepped for a colonoscopy. My experience was a little over five years ago while building a new home. I’m thinking it probably hasn’t gotten any better. We were using money from the wife’s recent inheritance from her mom, along with equity from the sale of the previous residence. We had to submit documentation from the trust settlement which included the sale of a rental property that was closing just before we did. There wasn’t any doubt it could be cleared thru underwriting, it was more a matter of timing and the costs associated with delay.
Cash sale is a little less troublesome since underwriting is not involved but similar paperwork has to be satisfied. A cash purchase of rental property eighteen months ago caused some raised eyebrows and requests for clarification.
I guess I’m surprised you somehow have to justify how it is that you have money for a transaction such as a home purchase.
I understand we want to fight money laundering and drug dealing and other money crimes. But do we have to be intrusive into everyone’s personal finances to do so?
Bernanke a known crook.
Why the hell does he have a MORTGAGE??? He’s a multi-multi millionaire.....not very smart to have a mortgage...what a doofus.
Because he’s poor. Just like Hillary. Living paycheck to paycheck, barely getting by. He’s common folk, one of the people. Just like the rest of us.
/S
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