Obama Got a Sweet Deal on His Mortgage Too

02 Jul, 2008 by Duane Lester

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The Washington Post is reporting that along with Christopher Dodd and Kent Conrad, Democratic presidential contender Barack Obama got a sweeter than normal deal on his mortgage:

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.

Nice. I wonder if everyone could get as sweet a deal as that. I’m not talking about the guy trying to scrape together a couple hundred thousand for a house. I talking about other richy-rich folks. Would they get the same deal as a former state senator who made it to the show?

Nope:

In Obama’s case, he received a lower rate than the average offered at the time in Chicago for similarly structured jumbo loans. He secured his final mortgage commitment on June 8, 2005, and during that week, rates on similar loans for which information is available averaged 5.93 percent, according to HSH Associates, which surveys lenders. Another survey firm, Bankrate.com, placed the average at 6 percent.

“It’s certainly safe to say that this borrower did better than average,” said Keith Gumbinger, an HSH vice president, noting that consumer rates vary widely. “It’s a good deal.”

I’m sure the Obamatons will excuse this as nothing out of the ordinary, even though “The Obamas had no prior relationship with Northern Trust when they applied for the loan.” Sure, usually you get a better deal than the people who have been banking there for years. That’s how it works.

See, the bank didn’t really treat him an differently than anyone else:

Unlike Countrywide, where leaked internal e-mails documented a special discount program for friends of chief executive Angelo Mozilo, Northern Trust says it has no formal program to provide discounts to public officials. Loan officers may consider a borrower’s occupation when establishing an interest rate, the bank said.

They just consider the occupation of United States Senator the same way they would, say, dog-catcher, or airline pilot. Oh, and then there is this:

Since 1990, Northern Trust employees have donated more than $739,000 to federal campaigns, including $71,000 to Obama, according to the Center for Responsive Politics.

Probably nothing to that either.

Next big speech for Barack: “I will never question anyone’s mortgage, and I condemn anyone who does!”

Cross posted at All American Blogger, where you can find other great original articles.