Wednesday, July 02, 2008

Obamas Got Discount Loan On Mansion Convicted Felon Helped Them Purchase

We already knew that Sen. Barack Obama and his wife utilized the services of corrupt Chicago influence peddler Tony Rezko to purchase their South Side Chicago mansion. Now we learn that the Obamas received a discount on their mortgage. The Obamas got a $300,000 price break on the purchase of the home after Tony Rezko's wife purchased the adjacent lot next door with money her husband gave her at a time several Chicago newspaper reports discussed an ongoing federal investigation of his corrupt influence peddling in Illinois politics. The Rezkos sold back a portion of the lot to the Obamas and built a pricey privacy fence to benefit the Obamas residence. The Washington Post's Joe Stephens describes the discounted loan the Obamas received from Northern Trust for their mortgage, which incidentally has contributed $71,000 to Obama's political campaigns:

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 . . .

The Obamas had no prior relationship with Northern Trust when they applied for the loan. They received an oral commitment on Feb. 4, 2005, and locked in the rate of 5.625 percent, the campaign said. On that date, HSH data show, the average rate in Chicago for a 30-year fixed-rate jumbo loan with no points was about 5.94 percent.

Jumbo loans are for amounts up to $650,000, but the Obamas' $1.32 million loan was so large that few comparables are available. Mortgage specialists say that many high-end buyers pay cash . . .

"A person's occupation and salary are two factors; I would expect those are two things we would take into consideration," said Northern Trust Vice President John O'Connell. "That would apply to anyone seeking to get a mortgage at Northern Trust." He added that the rates offered to Obama were "consistent with internal Northern Trust rates at that time."

"The bottom line is, this was a business proposition for us," he said. "Our business model is to service and pursue successful individuals, families and institutions."

O'Connell referred additional questions to the campaign.

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.

Even with the discounted loan, an analysis of the Obamas' mortgage deductions for the tax years in question indicates that the Obamas paid tens of thousands of dollars less in interest payments than they would be expected to pay under the discounted rate. The American Thinker says their reported interest payments on the mortgage reflect an interest rate of below 5%. It's possible the Obamas paid down the principle on the mortgage considerably in the first years to reduce their interest payments but that seems unlikely.

Just more of that change Obama has been promising the American people.

11 comments:

artfuggins said...

I wonder if Obama paid his property taxes....oh, no. I am confused that was McCain who had not paid his property taxes for 4 years on one of his seven houses...He just paid most, but not all, since it was ready to go into default. There is an investigation now to find out why he only pays less than $1500 property taxes annually on a house that normally would pay 4 or 5 times that amount. Hmmmmmm!

tarrandwoolley said...

So I am confused, this was a legal loan and everything was done right by the lender? Since Obama's loan is legal and was "consistent with internal Northern Trust rates at that time," I see no issue here.

I think Artfuggins reporting sounds more like something to follow to determine whether they are damaging to the Presidential aspirations of McSame.

Advance Indiana said...

You see what you want to see, Josh. The story makes it clear the Obamas received a below market interest rate on their home, which they couldn't afford without the assistance of convicted felon Tony Rezko. There remains many unanswered questions about where Rezko obtained the funds to purchase the lot next door to the Obamas home. It now turns out that a close friend of Michelle's and Rezko's landed a job at Northern Trust. that same friend helped out with the housing deals Rezko got from the State of Illinois and the City of Chicago, which later became complete dumps to the detriment of the tenants. It is not right when politicians are afforded special interest rate deals on their home mortgages when they are writing the laws which regulate the financial industry. Of course, you don't care. It's people like you who will allow the reins of our government to be turned over to a complete mystery man who fabricates lies about his family background, how he got where he is and what he represents.

tarrandwoolley said...

I look at it this way, I know that even if Obama was loosely associated with someone who committed a crime, at least he has a clear policy against, and would not champion, the cause of the following kind of policies that constitute crimes that McCain wants to continue:

http://www.thefourreasons.org/victimsofwar.htm

Again, because of this, my fear scale about what will happen if either of them take office, I would clearly tip towards Obama over McCain. The atrocities that occur if we stick with the same policies is more heinous and criminal than any white collar criminal that Obama might have been friends with in the past. McCain is now the champion of the Iraq War, and that should concern America.

Bart Lies said...

Let me also ask what Monroe Gray has done to correct his double-dipping homestead exemption and to pay back the credit he illegally claimed?

Lance Rasmussen said...

Countrywide's practices were consistent with their "internal practices" when they offered a sweetheart loan to Christopher Dodd. When the "internal practice" is sketchy, the execution of said practice is by definition also sketchy.

A marble powder room and a wine cellar. Wow, what a man of the people!

Concerned Taxpayer said...

I certainly hope and pray that Mr. tarandwoolley is going to be one of the first to enlist in the Army or Marine Corp when O'Bama's "peace talks" fail, and the terrorists once again attack us right here on US soil.

Jason said...

Yikes...

artfuggins said...

I had an opportunity to talk with my brother in law who is a mortgage banker. I presented him with the facts that you have written about here. He contends that a 30 basis point discount on this loan would not be unusual. The Obamas had considerable income including having just received a large advance on his book, excellent credit, standing in the community and little or no debt.
His response was that this was a very typical transaction.

Now if Michelle Obama was 4 years behind in property taxes and was carrying huge credit card balances or charged $750,000 in one month on an American Express card that might present a red flag. Of course, all of those refer to Cindy McCain.

Advance Indiana said...

Art Fuggins, You may want to do a little checking on the Obamas credit a short time before the home purchase. It was not too long ago that the Obamas were swimming in debt, including big student loan debts (higher than their mortgage) and credit card debts. Barry maxed out his credit cards with loans to his failed congressional campaign against Rep. Bobby Rush. He got in all kinds of trouble with the FEC because he accepted contributions from several contributors beyond the maximum amount allowed by law. Hence, he had to refund contributions and loan his campaign money to pay off his debts. It was reported when he gave his speech at the 2004 Democratic Convention, his credit card was declined by a car rental agency. When Obama was elected to the Senate, his financial problems seemed to just go away.

iPOPA said...

AI,

I like the line about how they might have paid down their principle early, but that doesn't seem likely. Ummm, how come? Many people do this, don't they? I know people who double up on their mortgage and car payments.

www.ipopa.blogspot.com