Interesting enough, Bernanke cannot use his speaking fees as income as the loan officer stated in the article. Because his speaking fees would be self-employment income or producing a 1099, he doesn’t have 2 years worth of speaking fees or freelance income to use for a loan.
According to Bloomberg News, former Federal Reserve chairman Ben Bernanke this week told a conference of economists in Chicago that he had trouble refinancing his mortgage. “I’m not making that up,” he is reported to have told Mark Zandi of Moody’s Analytics.
Bernanke’s financial disclosure form in 2011 lists one 30-year fixed 4.25% mortgage with George Mason Mortgage as his only liability, worth $671,200 for a Capitol Hill townhome. That works out to a payment of about $3,300 a month. Given that the current fixed rate for a 30 year mortgage at 4.19%, according to Freddie Mac, it makes likely that he may have been looking to adjust into a shorter-term mortgage, like a 10/1 jumbo ARM, which would save him about $300 a month, according to Bankrate.com.
So why is it so tough for perhaps for the man who was once the nation’s most powerful financial guru to get a refinance?
It could just come down to income.
While Bernanke had a verifiable salary of $199,700 while as Fed chairman in 2013, his new income might be much more difficult to qualify, even if it is much higher. Even with a reported $1 million book deal and a speaking appearance fee of $250,000, it’s the actual income on the books currently that is what counts. And the salary of a fellow at the Brookings Institute, where Bernanke actually is employed, is quite modest, just $35,000 to $50,000 a year, according to one well-placed source.
“A bank would see his speaking fee as that of a regular guy who gets a commission or a bonus that would have to be averaged over the past two years,” said Darren Ferlisi, a mortgage loan officer with Integrity Home Mortgage in Frederick, Maryland. “Unless it’s in the books with a minimum number of engagements, that number can’t be used,” Ferlisi said. In addition, Bernanke only left the Fed job at the end of January after an eight-year stint, so he doesn’t have two years-worth of freelance income to show to a bank, Ferlisi said.