“I recently tried to refinance my mortgage and I was unsuccessful in doing so,” said Ben Bernanke.

Bernanke is a man who knows about locking in low rates. As the chairman of the US Federal Reserve, he championed bringing interest rates down to zero, where they have languished since 2010. The zero interest rate policy – or Zirp – is part of Bernanke’s historical legacy.



The unfairness of Bernanke’s inability to refinance his mortgage is inescapable. Bernanke isn’t a subprime borrower. He currently commands $250,000 a speech, which means it would take fewer than three speeches for him to pay off his entire house. He has refinanced his mortgage twice: in 2009 and again in 2011, when he took out a $672,000, 30-year, fixed-rate loan at 4.25%, according to Bloomberg. This time, Bernanke was gunning for a rate as low as 4.19%.



And the reason why the refinancing did not go through this time around? His loan exceeds the conforming loan limit of $625,000 for Washington, DC, where his townhouse is located, Bloomberg Businessweek found.

If the former Federal Reserve chairman cannot refinance his mortgage, what hope is there for the rest of us?

We don’t know Bernanke’s credit score, but most of those who managed to successfully refinance their FHA mortgage loans as recently as August had a lofty score of 675, according to a mortgage tracking report from Ellie Mae. Those who were denied on their FHA refinancing applications had a credit score around 637. On conventional mortgages, the differences were even more stark: at a credit score of 735, their mortgage was approved; denied applications had a credit score of 720.



Those are alarmingly high numbers. No wonder the Washington Post reported that a number of Americans did not take advantage of refinancing.



A recent study estimated that in December 2010, 20% of American households with fixed-rate mortgages could and should have refinanced – but didn’t. Of these people, the median homeowner could have saved over $45,000 in payments over the lifetime of the loan.

Of course, there’s no guarantee that any of those households would have been approved for refinancing.

Then there’s the conspiracy theory around Bernanke’s move: is this a sign that he expects interest rates to rise in earnest? The Federal Reserve under Janet Yellen has denied that interest rates will rise any time soon – or at least, until the middle of 2015 at the earliest. Perhaps Bernanke just wanted to avoid the rush.



Tell us in the comments below: have you successfully refinanced your mortgage or failed to do so? What has your experience been with trying to get a new mortgage or refinance an old one?

