Barack Obama's Special Low-Rate Home Mortgage

Wednesday, July 02, 2008

BARACK OBAMA

It turns out Barack Obama does have a Chris Dodd problem. Thankfully for the Democratic nominee, he's ~~got a longer relationship with the lender, and~~* is not insisting that he thought it was normal to have a below-rate loan set up by the CEO.

The freshman Democratic senator received a discount. He locked in an interest rate of 5.625 percent on the 30-year fixed-rate mortgage, below the average for such loans at the time in Chicago. The loan was unusually large, known in banker lingo as a "super super jumbo." Obama paid no origination fee or discount points, as some consumers do to reduce their interest rates.

Compared with the average terms offered at the time in Chicago, Obama's rate could have saved him more than $300 per month.

Obama spokesman Ben LaBolt said the rate was adjusted to account for a competing offer from another lender and other factors. "The Obamas have since had as much as $3 million invested through Northern Trust," he said in a statement.

Modest adjustments in mortgage rates are common among financial institutions as they compete for business or develop relationships with wealthy families. But amid a national housing crisis, news of discounts offered to Sens. Christopher J. Dodd (D-Conn.), chairman of the banking committee, and Kent Conrad (D-N.D) by another lender, Countrywide Financial, has brought new scrutiny to the practice and has resulted in a preliminary Senate ethics committee inquiry into the Dodd and Conrad loans.

UPDATE: *Eh, not so much. Misread the LaBolt statement; turns out the mortgage was their first deal with Obama.

So, just to refresh…

Obama wants to buy a mansion, which the seller insists upon selling simultaneously with an adjacent piece of property that they also insist upon selling as a separate transaction. Obama can’t afford both, and turns to Tony Rezko, who is known to be under federal investigation at the time. Obama gets a mortgage below rates. I presume that by early 2005 Obama’s credit rating is good, even though in summer of 2000 he was having his credit cards rejected.

In 1993, he and Michelle had accumulated $110,000 for a down payment on their condo, but the Post article makes no reference to a down payment on the mansion. They presumably made some money from selling the condo, but again, no reference to the sale of that property.

He pays $300,000 below the asking price in the middle of the biggest housing boom in the nation’s history. Rezko’s wife purchases the adjacent lot for the full asking price. Then while Rezko is under federal investigation, Obama pays him $104,500 for a strip of land on the adjacent lot appraised to be worth $40,500.

UPDATE: The American Thinker looked at this as well.

07/02 08:29 AM Share