Obama Camp Denies Favorable Home Loan
On The Washington Post story “Obama Got Discount Home Loan,” http://www.washingtonpost.com/wp-dyn/content/article/2008/07/01/AR2008070103008.html?hpid=topnews the campaign, through spokesman Ben LaBolt, tells The Bourbon Room that Barack Obama received a loan that “anyone with the Obamas’ financial profile could have gotten the same rate on that mortgage.”
LaBolt says the Obama family was flush with cash at the time they were loan shopping and that the bank in question, Northern Trust, sought their business by offering a lower mortgage rate and to respond to a competitive mortgage rate offered by another lender. LaBolt would not identify the lender “at this time.”
“There was a competitive offer from another bank and the Obamas had a substantial amount of cash to deposit in the bank,” LaBolt said. “Northern Trust made the loan for commercial reasons.”
The Obama family secured a $1.32 million loan from Northern Trust for a $1.65 million home in Chicago. The interest rate was 5.625 percent on a 30-year, fixed-rate loan. The Post says the rate “below the average for such loans at the time in Chicago.”
LaBolt calls that comparison somewhat misleading in that the campaign considers the only valid indicator Northern Trust’s base rate for such mortgages.
“The average rate differs across the city and can differ from neighborhood to neighborhood,” LaBolt says. “The question is whether this was below the base rate at Northern Trust. It was, slightly, and that was because of the two factors (the competing bank mortgage offer and Northern Trust’s interest in obtaining Obama’s cash deposits).”
The Obama campaign in March posted on its website numerous documents related to the home loan. They can be found at the Obama website in the “Answers” section under the designation “home.”
Here is the link:
http://answercenter.barackobama.com/cgi-bin/barackobama.cfg/php/enduser/std_adp.php?p_faqid=174&p_created=1205534256&p_sid=9×3F7L7j&p_accessibility=0&p_redirect=&p_lva=&p_sp=cF9zcmNoPTEmcF9zb3J0X2J5PSZwX2dyaWRzb3J0PSZwX3Jvd19jbnQ9MSwxJnBfcHJvZHM9JnBfY2F0cz0wJnBfcHY9JnBfY3Y9JnBfcGFnZT0xJnBfc2VhcmNoX3RleHQ9aG91c2U*&p_li=&p_topview=1
According to LaBolt, the Obama family invested more than $3 million in Northern Trust, cash arising from a $2.2 million book deal the senator signed with Random House in January 2005. Five months later, Michelle Obama received a promotion to vice president of community and external affairs within the University of Chicago Hospitals system, a move that doubled her salary to $317,000. The home mortgage was finalized on June 8, 2005.
LaBolt says any accusation the senator received favorable treatment is false. Not only was the rate available to any customer of the senator’s financial profile, LaBolt says Northern Trust “doesn’t have a VIP mortgage loan program.”
The now-defunct Countrywide Financial had such a program and discount loans to Democratic Sens. Christopher Dodd of Connecticut and Kent Conrad of North Dakota have drawn scrutiny about lawmakers knowingly or unknowingly receiving discount mortgages as a backdoor means of winning access and favorable treatment for the lending institution.
This article is based solely on the fact that Obama’s loan was all of .03% less than the average. But his creditworthiness more than justified this tiny difference. Either the article is totally incompetent, or, more likely, the McCain campaign using a friendly journalist in a sleazy smear attempt.
So, if Obama claims that anyone could have received the discount at the time, perhaps the bank can inform the public, or at least its shareholders, how many below market loans it made at that time. This is awfully fishy, and there is not doubt more here than the Obama camp will admit. The discount amounts to a gift to Obama of over $100K. Or, to put it another way, it is like getting a $300 stimulus check each month for the next 30 years. I would love to see the internal bank documents regarding the loan approval. The Obamas didn’t have the income to justify such a large loan at the time (the doubling of Michelle’s salary came later). What Obama did have was a newly won Senate seat. Is it illegal to attempt to curry favor with a government official by offering a below-market loan?
I would love to get a .03% break on my house. I don’t care so much about this as I want
his contributions vetted.
Once again obama will SPIN this he never seems aware of the “favors” from his Chicago “friends” – “I made a bonehead mistake”, I did NOT know Rev. Wright was a Radical Racist preacher – for 20 yrs, I will/will NOT take public financing,……
Obama is a FRAUD -his preacher was RIGHT “Obama will say whatever he has to – he is a
Politician”!!! Obama CHANGES his message daily to suit his political gain.
Chicago Politics – and we think this man is about Change?
This home loan thing is a little petty, don’t you think? You used to be better, Major.
OBAMA DENIES EVERYTHING UNTIL HE GETS CAUGHT — THEN HE MAKES A GREAT SPEECH AND THE MEDIA AND DNC PROTECT THEIR ‘GOLDEN BOY’.
BARACK HUSSEIN OBAMA WAS “SELECTED” — NOT “ELECTED”. The DNC and biased media hid his sordid past until over half of America had voted.
Does anyone doubt Obama’s ability to “stage” events after this?
I mean a speech in Independence, Missouri about “patriotism”, while a surrogate talks trash about McCain’s military service. There’s something wrong when a “presidential” candidate feels they need to give a speech and EXPLAIN “PATRIOTISM”.
Obama is taking a very low road after pledging to have a campaign that doesn’t sling mud. I guess this is just another flip-flop by Obama.
His “words” and speeches mean nothing to this Independent anymore.
I get it, he “HOPES” you won’t notice how many times he “CHANGES” his position to suit the audience, the polls, the prevailing winds — or whatever!
This guy is the biggest fraud to come down the pike in the history of this country.
Wake up America!
VOTE FOR JOHN McCAIN IN 2008.
hey, he did put 20% down! 330k cash money. That’s a lot of green. this is not sleazy smearing, it’s a fact. they guy has a lower mortgage than other folks. what if he defaulted on this loan??? like others have done. please stop the crybaby nonsense everytime obama is questioned, it’s a smear. I don’t want this crybaby in the Whitehouse.
Oh, those dastardly “special interest” groups! As the 1952 famous TV program, “I’ve Got Secret”,
would ask after panelists submitted their votes, “Would the real (insert name) please stand!
Doesn’t everyone negotiate with the bank if they can? I do. And I am sure I got a slightly better rate because of it. Getting a 1/2% point or so break certainly doesn’t smack of anything, IMO. And of course the bank will give you a break if you agree to deposit money in the bank. Come on folks, we’ve got a lot of issues to talk about. This isn’t an issue, its a distraction. If you want to question “insider deals” and you want to be political, check out the deal Mrs. McCain got after her husband asked the FDIC to back off Charlie Keating (Lincoln Savings and Loan scandal). Now that’s favoritism. But it was also a long time ago so let’s not dwell on that kind of stuff either. Let’s focus on how we are going to elect people who will make an honest effort to keep our country afloat.
he received a special loan for the land as well, why not from the bank. amazing
My question is why did Obama get a book deal for 2.2 million in January 2005? He was essentially an unknown in national politics, and normally publishers don’t hand out that kind of advance for autobiographical material unless the subject is already famous. Who backed the Random House book deal that generated the cash to pull off the questionable bank loan?
[...] has responded with the explanation that the newly-elected was so popular among lenders, they were competing for his business: On The Washington Post story “Obama Got Discount Home Loan,” the campaign, through spokesman [...]
its going to be hard give away houses right now people are looking for large loans with no interest and fixed incomes so their house doesnt get possessed down the road like now!
I guess Garrett you are part of the media that makes something out of nothing. Obama put his home loan info outalready and Fox as usual is trying to embarke on a underhanded smear campaign. I guess thats why I watch MSNBC.
Was Mr. Obama’s mortgage really that out of the ordinary? Averages are poor indicators of significance. They’re a terrible way to tell whether or not a particular data point is out of the ordinary. That’s why statisticians never use an average alone to determine whether something is typical or not. HSH Associates (5.93%) and Bankrate.com (6.0%) were both quoted as sources for averages, but only a Vice President at HSH was given a chance to comment on whether or not the number was signficiantly lower:
“A good deal”? What is the median? The range? Have they performed any statistical analysis on this? Unfortunately, I can’t get access to the same HSH numbers without paying for them. Timing is critically important here — the Obamas received a verbal commitment of their interest rate on February 4, 2005, according to the campaign, but did not receive the final commitment until June 6, 2005. Thanks to Google’s news archive, however, I was able to find three articles listing rates from February 2005: one from February 2, a second from February 9, and a third from February 23. From all three of these articles, we can see the mortgage rates in Chicago weekly from January 27 until February 23:
It should be noted that these numbers are most likely composites of all types of mortgages — jumbo mortgages, on average it seems, have higher rates than regular mortgages. But, this does call into question the fact that Mr. Obama’s mortgage was in any way out of the ordinary. In fact, it was right in-line with the ordinary.
I’ve also posted this analysis on my blog.
Obama is a typical politician. Smear everyone else until you get caught with your hand in the cookie jar. Then deny any knowledge about any of it. With all of the issues that Obama has denied any knowledge of, I find it hard to believe that Obama is truly that clueless. Perhaps a much better and more plausible explanation is that Obama is misleading the American Public.
A new type of politician? Hardly! He’s just as slimey a politician as everyone else is.
It seems like there’s never anything suspicious when a politician secures a home loan that’s lower than the going rate. First Dodd now Obama…but God forbid we criticize Obama…I’m surprised we even got this information since he has yet to show us his official birth certificate unlike the doctored version on his website!!!
I tell you what, foxnews and the media are searching so hard to find anything they can to bring obama down because they are so afraid that he is going to win, its sad!! they have used every trick in the book, now its his mortgage!! lol give up he is our next president, get use to it!! obama for president!!!!
When will someone tell us how a man, who could not serve in the military because of admitted drug use, is fit to be Commander in Chief. Your answer Obama?
What happened to John McCain’s, property taxes defaults. He got away with it untill the media found out about it. Why don’t you report that.
I just did the same thing. I am buying a new house — contacted two mortage brokers, made them compete against each other. I got a bigger “discount” than Obama. Good think I’m not running for president.
The cash as a result of the book deal should not have been considered when granting the mortgage since it was non recurring. The income from the book decreased from 2005 to 2006. Without the income from the book it would have been close to get a mortgage on the recurring income of the Senator’s and Michelle’s income.
I just did the same thing with my mortgage this week. I contacted two mortgage brokers and made them compete against each other to see who would give me the better rate. I got a better “discount” than Obama! Good thing I am not running for president.
Obama is a typical politician. CHANGE…get real! WAKE UP VOTERS
It’s alright with me to point out faults with people. But in the presidential race, it would be nice to see both sides of the issue at hand.
McCain also has “House-Issues”
http://www.newsweek.com/id/143775/
Lets try to be “Fair-and-Balanced”
An American
I’d like to know if Hobama registered with the Selective Service when he turned 18.
Garrett find out!! If you read all these comments as you say you do you can also send an investigator to find out just where he was born, etc.
Cindy has paid the tax on her property.
Why don’t you get after Sharpton for not paying his millions in back taxes.?
I knew dems were confused on the word change. None of them could define what Hobama meant. CHANGE, HOPE, BRAND…..this years buzzzzzzzwords.
Come on now is this really news? I mean your story states that nothing bad happen once again smoke and no fire … Please try again and post some news please.
Thank you,
Cal Gal
PRESIDENT OBAMA IS GOING TO GET US ALL GOOD AND BETTER DEALS!!!!!! I CAN FEEL THE “CHANGE” A COMING!!!!!!!!
As someone with a finance degree this article has been particulary painful for me to read….mainly because it lacks any substance.
1) Roughly 50% of people get below an “average” loan
2) Obama’s credit rating is probably very strong
3) He had a 2.2 million advance on a book detail, which I believe was counter deposited into the loaning bank
4) Origination and point fees are used to reduce risk, it is not uncommon to not charge them
5) This results in a savings of $3,500 per year….hardly a “sweetheart loan”
As an independent I can say that this story is grasping for straws at best, and his loan situation is not unusual.
I can understand that some people may be looking for dirt, but they should really look in other places…because this entire article is a massive misrepresentation.
Horrible story…
As an independent with a finance background I can positivly say there is nothing unusual about this loan.
Given his cash on hand from his book advance, counter deposit, and high credit rating it would be highly unusual for him to NOT have a rate .3-.5% lower than the average.
It’s never ending with Snob-ama. He gets smoked out and then starts dancing. When are people going to wake up? Yah, he’s right this isn’t politics as usual it’s worse.
I am not a Obama supporter, but this story is ridiculous. I am a mortgage consultant. I’d like to see what rate the writer of this story has on his mortgage. I am sure that I can make the same accusation about his loan. Mortgage rates change everyday. Borrowers pay points plus there are MANY things that go into determining an interest rate.
this does not surprise me at all and I don’t understand why … if you have money, you get the best rates. why should people who have less spendable income not have a chance for the better mortgage rate. We pay our bills on time, we pay our mortgages, without defaulting and leaving the litter for somebody else to clean up, and we observe the rules. Personally, I see this Obama character as a charleton with his strings being pulled by somebody because he talks and says nothing. Why would anybody want him to be president? This world is in trouble and he couldn’t lead a county, much less the United States.
OH boy, can’t wait for the next speech to come out. What a sap!
PUMA
Mr. LaBolt said the”average rate differs across the city and can differ from neighborhood to neighborhood”. That sounds very much like REDLINING and the last time I checked, that is illegal!
Don’t forget this was a jumbo loan which carries a much higher rate than the traditional loan would.
His discount was more than $1400 a month than $300 that was reported.
I think rather than concentrating on whether BO got a below market loan, I think we should look at the last part of the Washington Post article:
Quote:
Obama’s house purchase has been a source of controversy. In 2006, the Chicago Tribune reported that on the day of the closing, the wife of Obama’s longtime friend and fundraiser Antoin “Tony” Rezko closed on an adjoining lot that had been the estate’s side yard.
The Obamas bought the house for $300,000 less than the asking price of $1.95 million, while Rezko’s wife, Rita, bought the neighboring lot for the full asking price of $625,000. Rita Rezko later sold a portion of the undeveloped lot to the Obamas, enlarging the senator’s yard.
Tony Rezko already had been linked to a grand jury investigation involving public corruption. Last month, he was convicted of 16 counts in an influence-peddling scheme that reached the highest levels of Illinois state government.
Unquote.
You Dems need to put down the Kool-Aid and face the fact that BO learned how to squeeze cash from reading Mrs. Clinton’s book on futures trading.
Two questions:
1. Has Fox ever run a negative campaign story on McCain as a part of its “fair and balanced” reporting?
2. Could we please provide Sean Hannity with blood pressure medication…he turns positively apoplectic when he rails on Obama every night.
You can get 5.625 30yr. fixed on a conventional loan under 417,000. The Obama’s loan of 1.3 million is considered a Jumbo loan. The going rate at that time was about 6.25%
So, how is the Economy? How is that war in Iraq? Where is Osama Bin Laden? Who has really paid for 9/11? The housing crisis? I forget, who was in office for that one? How are gas prices? How is your family doing? How are the bills working out for you? How about the extremely high energy prices over the last 7.5 years?
WAIT!!!! Lets argue about Obama’s loan. My rate was lower than that, guess I am out for President, and im poor, lol.
Better yet, lets argue about lapel pins, and pledging allegiance, and preachers, and hair cuts, and fist bumps, and scarves on Rachel Ray, and racism, and age, and religion!
Or, how about we debate the issues I first mentioned? How about we dont go into a campaign fearing for our lives? How about we go into a campaign with solutions to stop the fear, solutions to stop the recession, solutions to end a war in Iraq that absolutely nobody can explain now? How about we make sure our children our educated, our men and women have jobs, our respect around the world is restored?
Politics have become republican. And not really republican, just fear-mongering. There is no talk of policy, there hasnt been since Bush took office. His policies have been horrendous, all he has offered is war.
How about real discussion about what WE face?
By the way, Hannity and O’Reilly, you are both morons.
God Bless America.
Come on people, Is this all we have to worry about? We have gas over $4 a gallon, Milk $7 a gallon and people losing thier homes everyday. This is one of the reasons we are so behind time, we worry about the wrong things. We all know what this is about. you question his love for his country. To me, loving your country is looking beyond a person’s skin color and realizing that we are all made in the image of God.
Maybe he will deny Chris Mathews
getting a tingle up his leg next?
What has obama done for americans lately?
he has used race to win primaries
he has trashed clintons.
he has divided the dems.
he has insulted women“sweetie“
he has showed us “what arrogant means=obama“
he has told us true meanings of SNOB,ELITIST,S*XIST,RACIST,SAME OLD POLITCIAN with brand new copied speeches
he has shown us that its okay to copy speeches
he has shown us “how to flip flop effectively
he has shown us “how to make MSM his pet and keep them in his pocket `where his phone vibrates
ha has shown us “why some americans r bitter “
he has shown us what `a typical white person looks like
he has shown us his greatest racist ever priests and friends
he has shown us ——NO MORALS,NO VALUES,NO PRINCIPLES,NO CHARACTER,NO CLASS……
If Repubs think that all borrowers should pay the same interest rate regarless of income, assets and credit score then perhaps they should pass a law mandating such a policy.
The Obama loan was compliant with the prevailing loan terms and conditions prevalent for borrowers at that specific time with their credit profile.. I support McCain but these mortgage favoratism charges against the Obamas are just false. They shopped their deal and Northern Trust kept the depository relationship, I’m quite sure.
I’m not that troubled by the rate on Obama’s mortgage. What’s truly disturbing is the fact that Michelle Obama got a promotion after her husband was elected to the US Senate and more than doubled her salary. I’ve received a number of promotions in my career and never received a raise even close to that. Was the University of Chicago Hospital system hoping to buy influence? A few earmarks perhaps? Something about this smells.
In addition, the full Washington Post article that was the basis for Major’s blog states that the home that the Obama’s purchased has “six bedrooms, four fireplaces, a four car garage and 5 1/2 baths, including a double steam shower and a marble powder room. It had a wine cellar, a music room, a library, a solarium, beveled glass doors and a granite-floored kitchen.” I wonder how much energy the great environmentalist Obama’s house uses. Once again he is shown to be a first class hypocrite.
[...] Obama Camp Denies Favorable Home LoanWith rising interest rates and inflation taking a toll on home loan customers, banks are beginning to encourage them to partly prepay their loans. … [...]
[...] Click here to read more on the Obama loan terms on Major Garrett’s blog. [...]
Javier…
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Futures Trading System…
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