WashPost: Obama got discount on mortgage

The Washington Post reports that Democratic presidential candidate Barack Obama (pictured) received a discount on his home loan that saved him roughly $300 per month: "Shortly after joining the U.S. Senate and while enjoying a surge in income, Barack Obama bought a $1.65 million restored Georgian mansion in an upscale Chicago neighborhood. To finance the purchase, he secured a $1.32 million loan from Northern Trust in Illinois."

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

UPI leads with reaction from the Obama campaign: "Campaign officials and the financial institution involved say terms Sen. Barack Obama, D-Ill., received on his Chicago home mortgage were proper."

Andrew Sullivan blogs that the story is missing a key piece of information: Obama's FICO score. He quotes Nate Silver: "Unless the Washington Post has access to Obama's FICO score -- and unless it has rented an apartment to him, it probably doesn't -- it is missing a pretty important piece of information on what Obama's mortgage rate ought to have been. What was Obama's FICO score? ... I would think that the Obamas were exceptionally creditworthy. So indeed, Obama received a "discount" -- the same discount that any borrower in his position would have received."

News or not? You decide. Obviously I think it is. Financial information about candidates is news. How much money do they make? How much do they borrow? At what terms, and from whom? In a time of mortgage madness, what kind of mortgage do they carry? McCain's mortgage would be news too.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo credit: Associated Press

Comments

[Sigmond]

What does Cindy McCain's delinquency paying a property tax have to do with the article about Obama getting preferential loan treatment? lol

[MyLessThanPrimeBeef]

I think if the $1.65 million house was only 3 times the combined gross income of him as a future senator and his wife at the time, before his book was published, I would consider that prudent. I should note he did put up the traditional, conservative 20% downpayment, unless that, or part of that, was borrowed as well.

I would also say that only by the narrowest defintion of LALand would this story not be relevant. But I am a believer of Indra's Net, so I think there is a place here for it.

Also, when it becomes really hard to tell a Democrat from a Repulican, the voters can't be faulted for reducing their decision-making to trifle fascination with mundane matters like shape of underwear, haircut cost or the size of the candidate's bathroom.

Furthermore, personell issues are as important as policy ones. Who knew Mr. Wolfwowicz was going to run Bush foreign policy? Again, since the voters don't know, the media's not asking and the candidates aren't volunteerring, they are reduced to focus on trivialities, like judges in a beauty contest for Mr. Handsome, Charisma, Hip or whatever should. These candidates are grown adults; they should know who they want for their press secretary, CIA director, Fed chairman. And they have years and years to think about and should disclose that. We should be voting for a government, as in many department chiefs, and just not the head of a personality cult with a little bit of policy promulgations on the side that may or may not be relevant in year 2 or 3 of the presidency.

A candidate can say he's for tax reduction or whatever only to reverse his promise once he's elected and then claims to have access to previously unavailable info about the state of the nation or situation. It's like whatever they say now matters little.

So, we are like an employer looking to hire and all have equally hard-to-believe (rightly so) resumes. The smart boss throws them away and instead looks at small, intangible, non-verbal things, like how they dress, if their eyes wonder over to the pretty secretary, whether they dare, for a change, to profess their true religious beliefs in the face of the Grand Inquisitor. Maybe that's too much to hope for.

In any case, that's my little voice for the much maligned voters. If they want to know how a candidate financed his house, it's for a very rational reason.

[Wiggly]

Jeez. What a crock. I must have an insider loan too because it seems like my terms. $300 variation on a $1.3 million loan? There are so many things that could account for that. If it were $1,000 or more away from the average then it might start to seem fishy, but my guess is that in terms the average homeowner in the US understands, $300/month is huge. That would be a massive difference in home in San Antonio. Good job, hit squad, you'll probably see some legs on this one.

[manraygun]

"What does Cindy McCain's delinquency paying a property tax have to do with the article about Obama getting preferential loan treatment? lol"

I guess if you're unfamiliar with the concepts of media bias, journalistic integrity and election, yeah it's a lol. Which solar system are you from again?

[manraygun]

"Uh, because it's not the same thing as taking a favor?"

Your smug question might make sense if this were the "Taking a Favor Blog". However it's a real estate blog that has waded into politics lately. So when Peter blithely slams Obama for something tangentially related to the topic of LA Land, I think it fair to question why not the same treatment of McCain's story -- which is just as related (or unrelated) to "LA Land" as the Obama post. Time to Take Six.

[steve conn]

This is the same guy who couldn't vote for a THIRTY PERCENT INTEREST CAP on predatory loans. Supported by the financial industry (opensecrets.org).So here's another reason to vote for Ralph Nader.

[TakeFive]

Posted by: manraygun:

“Your smug question might make sense if…”

I makes perfect sense because of the illogic of the comparison. The McCain’s past due property tax is just that – a past due bill. Big Deal. Who hasn’t been late on a bill (or in filing taxes). And, it’s on the public record, secured by the property.

Obama, by contrast gets deal for some unknown reason, for which he may or may not have some future obligation. As a senator, he may have regulatory oversight over this party (see: Dodd), or as president may be confronted with another of these pesky “distractions” (see: Monica).

[retrometa]

Obama is opposed to wealthy people getting all the breaks, and then the Senator secures a sweetheart deal from his mortgage broker. Obama won't participate in Philadelphia's Democratic party's habit of giving voters "walking around" money to get to the polls, but he's willing to help pay down Hillary Clinton's debt. Obama says he favors public financing of presidential campaigns -- and then turns down public financing of his campaign.

Are we seeing a pattern here?

[Mike P.]

The monthly payment on a $1.32M loan at 5.625% over 30 years is about $7,600/mo. Since the article says Obama 'could have saved more than $300/month', we can assume it was under $400 he saved (otherwise the article would've said, 'saved over $400/month'). So his payment might've been $8000/month without this 'special' loan.

The difference between $7600 and $8000 per month comes out to be a 5% discount on his monthly mortgage payment.

"Could have saved him?" That's innuendo.

There is a big difference between this and Chris Dodd getting his 'friend-of-Mozillo' Countrywide loan and then letting BoA write the latest housing bailout bill with a tab we're going to be stuck with.

[Chris]

THIS JUST IN!!!!!1

Obama bought groceries in 1998 - AND USED COUPONS!

God the mainstream media blows. You really suck.

[Lee]

Puleez...the Washington Post ran this story? Was it a really slow news day? It's not even news worthy, much less something to remotely consider improper or showing some sort of favoritism. As one of the previous comments noted - what about McCain and his wealthy significant other who own ? 7 [seven!] homes? What sort of interest rate is he currently paying?

[ice weasel]

This site is interesting until you start whining about politics Peter. Seriously, stick to the real estate, leave the mud slinging to other folks. This is pathetic.

[TJ]

Sounds like he took favors from s special intrest group. Something he swore he never did or would do. Liar like the rest!

[john1117]

This is news???

[William Anderson]

i'm not voting for Obama either. Am I surprised that this typical politician continues to do more spinning? After all, he claimed to have barely known, convicted felon and slum-load to poor blacks, Tony Rezko, billing a mere handful of hours as a lawyer. Yet, lo and behold, Tony Rezko's wife opened up and shared the escow with Obama on that lovely restored Georgian mansion in the good side of Chicago. It's a great country, isn't it, Michelle Obama? (Think" terrorist fist bump" as the Obamas/Rezkos closed escrow.)

[Mark]

That doesn't sound like that great a deal to me...We got 5.25 on a home refinance about the same time. Do we really want a president who can only negotiate the bank down to 5.625%? Seriously though, this is the biggest non story about Obama that I've seen yet.

[wpw3]

Peter, you are an idiot. I intend no malice in that honest assessment. If you have to ask us, the readers, if this is news then the Times needs a another chief editor.

[pcdoc]

It is deeply saddenng to see journalism stooping to such low levels. How much are the republicans paying you mate?

[Obambre]

yawn.

[beefaroni]

for pete's sake. is this news worthy? If I was ever to become a senator i would hope that I could get a discount here and there.

[Andrew]

Thats the worst thing you can drag up on this guy? So what. What does this have to do with the price of tea in China? So he has a high income, probably great credit and got a great loan? He's a low risk, he could write a book and pay it off.

[Fred]

This guy is a new kind of politician.....riiiight... you bet he is...

Well it is true. He IS the first Moslem/Christian ( wait a minute... NEWS FLASH! Some asians are sending him some other god in the mail....) MARXIST campus commie pinko weirdo that has run for Prez....

And just think, folks...His Wife may be just slightly worse...by two clics...

He couldn't have my vote for Dog Catcher in hell

[SoCalGal]

The ONLY WAY it could be determined if Obama got a special deal was to see his particular lender's rate sheet on the date the interest rate was locked. "Averages" or any other point of comparison is absolutely meaningless.

Anything else is sheer speculation and should have no place in a newspaper of journalistic integrity. Shame on The Los Angeles Times!

[bree]

journalist trying desperately to make the news! stretches the bounds of believability by presenting information to fit his own frame. film at 11.

[RO]

US Senators only make $170k/yr, how can you pay a 1.3m mortgage -- at the rate quoted it would be $7,700 per month -- on that salary? Am I missing something? Do Senators make money on top of their salary from the federal government? Please help me understand this.