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 million 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.