No doubt you know mortgage lending standards have gotten tougher over recent years. And that’s a good thing as recent CFPB rules have eliminated certain types of loans such as loans where income or employment isn’t documented, so-called “alternative” loans. Well, that’s not exactly true, lenders bernanke can't get a loancan make any loan they want as long as they don’t discriminate but if a lender does make such a loan it won’t be able to receive the coveted, “qualified mortgage” status which protects the lender from future litigation regarding a specific loan.

No, mortgage rules have gone back to traditional standards generally used prior to the widespread use of alternative and subprime mortgages.

But have they gone so far the even the former Fed chair can’t even get a loan? It was reported in the Wall Street Journal and other sources that Ben Bernanke tried to refinance his mortgage but was turned down. Speaking at a conference, Chairman Ben claimed he couldn’t refinance due to tighter lending standards and perhaps those standards were too rigid. But without looking at Bernanke’s loan application, from this desk it’s easy to see why he couldn’t get financed. And he can thank the CFPB.

Bernanke is no longer employed at the Federal Reserve. He makes speeches, he’s writing a book and he does some consulting. He’s now self-employed and doesn’t get W2 income from an employer. He could qualify previously for a loan when he had at least a two year history of full time employment and a regular paycheck verified by pay stubs and income tax returns.

The kicker? Self-employed borrowers must show at least two years of consistent income. Bernanke quit the Fed earlier this year. He’s self-employed but only for a few months. Lenders can’t make exceptions by not verifying income or following standard approval guidelines. His speaking fees are spotty and the advance he got on his book can’t be used because there is no two year history of receiving it. Very much like we pointed out how banks view flipping income in a previous article.

No, lenders didn’t suddenly turn vicious. They just returned to common sense underwriting.