Obama’s ‘Sweetheart’ Home Loan

The Manufactured Outrage of the Day comes to us from Joe Stephens and his page A3 piece for today’s Washington Post, “Obama Got Discount on Home Loan.”

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.

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.

Why, that’s not right! A millionaire Senator getting a more favorable home loan than some average schmoe? How could that be?!

Actually, that’s rather a question that answers itself, no?   Nate Silver issues an “Irresponsible Journalism Alert” and points out that:

[T]he amount of the loan and the nature of the property are not the only factors that determine a mortgage rate. Another major consideration is the creditworthiness of the borrower. According to current rate quotes from myFICO.com, a borrower with very good credit can expect a mortgage rate about 30 basis points better than someone with pretty good credit, and a borrower with excellent credit can expect about a 50 basis point discount.

How credit worthy was Obama?  Well, aside from being a United States Senator, a steady gig if ever there was one, and having just received a $2.27 book deal, he and his wife combined to make around half a mil a year.  Not Rush Limbaugh money, to be sure, but he was probably a decent credit risk.

Ed Morrissey wants to know, “Can the lender identify (anonymously) any other borrower during the relevant time period that got the same favorable rate and, if so, what was the basis for setting the rate that low for the other borrower(s)?”  Not an unfair question especially, as Ed notes, when “Obama has spent plenty of time castigating credit lenders in this campaign for their capricious practices and bad management.  He has rung the populist bell, saying that ordinary Americans can’t get a break from lenders while the powerful play by different rules.”  But, yes, I’d be willing to bet that other well-heeled folks got these kind of rates.

Obama’s spokesman claims, “Obama received the same rate as would have been available to anyone with his financial profile and with an offer from another institution.”  I’m inclined to believe him.

To the extent this has legs it will, like the Cindy McCain back taxes scandal, be because it draws attention to the fact that the Obamas and McCains make a whole lot more money than regular folks and get treated better because of it.  But who didn’t already know that?

Major caveat:  Larry Johnson promises that “shortly, we will reveal additional details.” Given how famous he is for doing that, I’ll be refreshing that page every few minutes.*

Other responders at memeorandum: The Crypt’s Blogs, TownHall Blog, Redstate, MSNBC, Flopping Aces, michellemalkin.com, puma pac, Right Wing News, The Caucus, The Campaign Spot, Fox News, Confederate Yankee, Salon, Ben Smith’s Blogs, TBogg, Brilliant at Breakfast, Political Machine, Comments from Left Field, TPM Election Central, The Swamp, JammieWearingFool, Macsmind, Bark Bark Woof Woof, The Political Carnival, Whiskey Fire, Washington Monthly, The Campaign Spot, and Jack & Jill Politics

____________

*Yes, this I’m being ironic here.   Like a pony.

FILED UNDER: Campaign 2008, Economics and Business, , , , , , , , , , , , , , , , ,
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Derrick says:

    Oh yee of little faith, Larry Johnson’s Best Friend’s Uncle’s Hairdresser’s Bookie (and Karl Rove) have the scope but they won’t disclose it until October when it has maximum impact.

  2. Bithead says:

    James,
    You’re correct that Senators getting sweetheart deals is hardly new, and should not be wondered at. Stuff happens all the time, despite the moral implications.

    Where the facts take a turn is when Obama himself makes such loud and outraged noises at the very company he benefits from.

  3. Michael says:

    Where the facts take a turn is when Obama himself makes such loud and outraged noises at the very company he benefits from.

    So you’re saying Obama shouldn’t be making loud and outraged noises as companies that give him good deals?

  4. Bithead says:

    Mike, it does seem a little diingenuous to be making political hay from bitching about sweetheart deals, when you’re the direct beneficiary of one.

  5. anjin-san says:

    Mike, it does seem a little diingenuous to be making political hay from bitching about sweetheart deals, when you’re the direct beneficiary of one.

    Of course McCain has never done this…

  6. Michael says:

    Mike, it does seem a little diingenuous to be making political hay from bitching about sweetheart deals, when you’re the direct beneficiary of one.

    On the flip side, it seems a little corrupt to _not_ make a fuss about sweetheart deals, just because you’re the direct beneficiary of one.

  7. Michael says:

    Of course McCain has never done this…

    That’s not the issue here.

  8. just me says:

    I think that anyone surprised that the rich and powerful get good deals on their mortgages needs to wake up and smell the coffee.

    I do agree that it is hypocritical of Obama and congress in general to rage against lenders for providing good deals to qualified borrowers and not providing them to the less qualified.

    There is a good reason a high income and good credit score gets you a sweetheart deal and why poor credit and shoddy empoyment history do not.

  9. Steve Plunk says:

    I make this statement not directing it to anyone in particular. It’s the hypocrisy stupid.

  10. Zelsdorf Ragshaft III says:

    Anjin, nice attempt to change the subject. If you wish to equate McCain with Obama, where to start. How about public service. McCain was military for years, Obama chose to be a community organizer (?) what ever that is. Let us take a brief look at the community he organized. How about the quality of housing in that community. Ace of Spades has an article you need to view. Obama helped alright, he helped Tony Rezko make a lot of money. Some of the housing in unlivable. All at public expense. I think Obama is forsale and wants to be the first Black to smoke crack in the Whitehouse.

  11. Michael says:

    If you wish to equate McCain with Obama, where to start.

    How about on another comment thread.

  12. Nikolay says:

    You’re correct that Senators getting sweetheart deals is hardly new, and should not be wondered at. Stuff happens all the time, despite the moral implications.

    Hey, Obama paid 5.625 percent while the average was 5.93. The average percent doesn’t mean the right percent, only the average one. Approximately half of the people are shorter than the average person, that doesn’t mean that there’s something wrong with them.
    This is so stupid, it hurts.

  13. steve says:

    He had just signed a book deal for over 2 million dollars which is more than the value of the mortgage. That gets you a better deal. My corporation gets a better than average deal on our line of credit as our property is paid off and way more than the credit line we rarely use. The bank knows there is essentially no risk in the loan.

    Steve

  14. Mark says:

    HUSSEIN Obama is another corrupt politician? Told you so.

  15. Christopher says:

    Obama got a sweetheart deal and even hired the bastard that doled them out to other democrats. Yet he is for “change we can believe in”.

    Obama is like Dr. Frankenstein creating the monster, then joining with the mob to try to kill the monster. If he gets challenged he merely throws his lab assistants under the bus, and points out that the other members of the mob as “just as bad as him”. Obama’s campaign could be as funny as “Young Frankenstein” if it weren’t so pathetic.

    Obbama is bringing hypocrisy to new levels of shame. And liberals actually support the guy?

  16. Polimom says:

    Actually, calling Obama’s loan terms a “sweetheart deal” is incredibly misleading. It’s not at all unusual for someone with excellent credit, stable employment and good income to get lower rates and/or better terms.

    One doesn’t have to be a senator to meet those criteria.

  17. Zelsdorf Ragshaft III says:

    I have been waiting to write this. It is just a little off topic, as it is still about Obama but not about his loans. Obama is against the free trade agreement with Colombia. I could not think of the reason why. Then it came to me. That is where Che was killed. That picture in his Texas campaign headquarters was not a fluke. One of Obama’s heroes as well as that of associates Ayers and Dohrn was Che Guevara, killer and Marxist.

  18. bob in fla says:

    Well, gee . . . No one has brought up the 20% down payment that the Obamas put down on the property. That fact by itself, should qualify anyone for a below average interest rate. So what is the big deal here? I don’t see it.

  19. Proofreader says:

    Has anyone noticed the misspelling in the title of the article, i.e “Obama’s ‘Sweetheat’(sic) Home Loan?!”

    Either Mr. Joyner doesn’t proofread, or-he apparently-has a crush.

    Heh — my wife mentioned it during dinner but I forgot and didn’t get around to fixing until about an hour ago. Firefox does a good job of catching spelling errors but, for some reason, not in title boxes. – jhj

  20. Bithead says:

    I’ve noticed that too, Hames… and I think I know why. THe plugin is looking at the raw HTML, not the text. So, for example say your headline has a (h2)(/h2) envelope. Assuming there’s no spaces between the text and the HTML, the spellchecker won’t trip on the mis-spelling, because it considers the envelope as part of the word. Follow?

  21. James Joyner says:

    THe plugin is looking at the raw HTML, not the text. So, for example say your headline has a (h2)(/h2) envelope. Assuming there’s no spaces between the text and the HTML, the spellchecker won’t trip on the mis-spelling, because it considers the envelope as part of the word. Follow?

    Actually, yeah, that’s a good point. And mine do wrap as H2.

  22. Michael says:

    Firefox only spell-checks textarea fields, not input fields. I’m not sure how WordPress’s editor works, but if the title field is separate, changes are it’s just an input.

  23. Ted says:

    If Hillary doesn’t get the top of the ticket, I think Sarah Palin is the way to go. I think she’ll be the first female President (after serving one term as VP under McCain).

    I came across this site: puma4palin.blogspot.com

  24. Ted says:

    Well, it’s either gonna be McCain/Palin or …

    Barack Obama starring as “Change” the Gardener in remake of movie classic, “Being There”, starring Peter Sellers as “Chance” the Gardener!

    *HT to hs commenting on
    puma4palin.blogspot.com