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:
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.