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Thread: Obama's Loan- Did He Get Special Treatment?

  1. #1
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    Obama's Loan- Did He Get Special Treatment?

    Obama, Like Dodd and Conrad, Got Cheap Home Loan

    Wednesday, July 2, 2008 10:36 AM

    By: Rick Pedraza Article Font Size

    Presidential nominee Barack Obama joins the list of several other high-profile Democratic Party members who received highly favorable home loans.

    Obama, D-Ill., reportedly purchased a $1.65 million mansion in Chicago through a “super, super jumbo” loan he received from Northern Trust Bank in Illinois, the Washington Post reports.

    The portion of the money financed through the lender ($1.32 million) was offered to the Obamas at an unusually low discount interest rate locked in at 5.625 percent over the life of the 30-year fixed-rate loan, which was below the average of what a typical Chicagoan pursuing a similar low loan rate received at the time.

    For his part, Obama and his camp are defending the lower rate as lender competition for business. A spokesman for the camp says, “The Obamas have since had as much as $3 million invested through Northern Trust."

    Obama joins Sen. Chris Dodd, D-Conn., and Sen. Kent Conrad, D-N.D., on the list of high-profile public figures who received “VIP” loans that some now are scrutinizing as alleged trade-offs for political favors.

    According to a report released last month by Condé Nast, Dodd received highly favorable loans under the designation, "Friend of Angelo," a reference to embattled Countrywide Financial Corp. head Angelo Mozilo.

    Dodd, who chairs the Senate Banking Committee, received loans from Countrywide that reportedly saved him tens of thousands of dollars.

    Conrad also has been named as a recipient of special-consideration loans from the beleaguered lender.

    Countrywide is the same bank involved in the loan scandal that caused Obama's vice presidential Vetting Team Chief James Johnson to resign amid criticism over his personal loan deals with the lender.

    Other Democratic Party participants involved in questionable "VIP” home loans include former Secretary of Housing and Urban Development Alphonso Jackson, former Secretary of Health and Human Services Donna Shalala, and former U.N. ambassador and assistant Secretary of State Richard Holbrooke, Condé Nast reports.

    Obama's rival for the White House, Sen. John McCain, R-Ariz., has also fallen under home loan scrutiny for an embarrassing report Newsweek recently published revealing that the McCains failed to pay taxes on their beach-front condo in La Jolla, Calif., the last four years and, for a time, were in default.

    The McCains, Newsweek reports, paid the last of the taxes owed on the property on June 27, shortly after the story broke.

    © 2008 Newsmax. All rights reserved.

    [url]http://www.newsmax.com/insidecover/obama_loan_scandal/2008/07/02/109261.html?promo_code=2A89-1[/url]

  2. #2

  3. #3
    We're not allowed to criticize Obama. Instead, let's criticize the source of the story.

  4. #4
    "Newsmax is invald. Rick Pedraza is a hack." - IJF

  5. #5
    Weak, weak, weak story.

    First of all, 5.625% in 2005 is not particularly cheap. The WaPo story this is based on describes it as 30 basis points below average for homes of that size.

    Banks will move rates like that all the time if, say, an applicant had an extremely high income (like, say, a huge selling book), the applicant had extremely good credit (like, say, someone who reportedly has not a dime of credit card debt, a stable, high-profile job and lots of cash) and also when multiple banks compete to give a loan (which they often do with low-risk loans).

  6. #6
    Also worth noting: 50% of all mortgages can be described as "below the average rate."

    That's why its the average.

  7. #7
    Why does this forum have threads on Obama's loan and McCain's house?

    Because you're all partisan hacks.

  8. #8
    What rate did you get on your mortgage?


    [QUOTE=pauliec;2611604]We're not allowed to criticize Obama. Instead, let's criticize the source of the story.[/QUOTE]

  9. #9
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    [QUOTE=nuu faaola;2611659]Weak, weak, weak story.

    First of all, 5.625% in 2005 is not particularly cheap. The WaPo story this is based on describes it as 30 basis points below average for homes of that size.

    Banks will move rates like that all the time if, say, an applicant had an extremely high income (like, say, a huge selling book), the applicant had extremely good credit (like, say, someone who reportedly has not a dime of credit card debt, a stable, high-profile job and lots of cash) and also when multiple banks compete to give a loan (which they often do with low-risk loans).[/QUOTE]

    sure it's a non-story....of course according to the WaComPost he also paid no points on the discounted mortgage either:

    [QUOTE]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. [/QUOTE]


    [url]http://www.washingtonpost.com/wp-dyn/content/article/2008/07/01/AR2008070103008.html?hpid=topnews[/url]

    as the paragraph states lower mortgage rate = higher points....well that's if he were just a common man...

    off the topic but it's ironic that just as BO was getting this sweetheart deal his bitter half's pay tripled from the hospital her husband was about to earmark $1-million....
    Last edited by Come Back to NY; 07-03-2008 at 11:17 AM.

  10. #10
    [QUOTE=Come Back to NY;2613087]sure it's a non-story....of course according to the WaComPost he also paid no points on the discounted mortgage either:




    [url]http://www.washingtonpost.com/wp-dyn/content/article/2008/07/01/AR2008070103008.html?hpid=topnews[/url]

    as the paragraph states lower mortgage rate = higher points....on a $1.3 mill mortgage his points should've been around $40K- well that's if he were just a common man...

    ....[/QUOTE]


    Yes or no: Do banks routinely offer better terms to more qualified applicants?

    Yes or no: Would a guy with $3 million in the bank, steady income and not a dime of credit card debt qualify as a more qualified applicant of the sort banks would compete to lend money to?

    None of this even borders on unusual. 30 basis points is not a steep discount.

  11. #11
    [QUOTE=cr726;2612645]What rate did you get on your mortgage?[/QUOTE]

    I'm at 4.875% myself, for a few more years anyhow.

  12. #12
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    [QUOTE=nuu faaola;2613099]Yes or no: Do banks routinely offer better terms to more qualified applicants?

    Yes or no: Would a guy with $3 million in the bank, steady income and not a dime of credit card debt qualify as a more qualified applicant of the sort banks would compete to lend money to?

    None of this even borders on unusual. 30 basis points is not a steep discount.[/QUOTE]

    good way to completely avoid the issue posted....:thumbup:

  13. #13
    Brutal.....

    [QUOTE=Come Back to NY;2613111]good way to completely avoid the issue posted....:thumbup:[/QUOTE]

  14. #14
    [QUOTE=Come Back to NY;2613111]good way to completely avoid the issue posted....:thumbup:[/QUOTE]

    By "completely avoid," I assume you mean "offer a dispassionate, factual account of obvious flaws in the story.

    The fact is this is weaker than weak. You can tell that becasue 75% of the original article is dedicated to the completely unrelated Countrywide loans that went to Chris Dodd and Kent Conrad (which are fishy, imo).

    What the article says is that Obama got a loan at a rate below average, something that could be written about 50% of the loans issued in the U.S.

    There are many, many legitimate reasons loans get discounted, several of which (high income, lots of assets, low debt, competition from other lenders) clearly apply here.

  15. #15
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    [QUOTE=nuu faaola;2613176]By "completely avoid," I assume you mean "offer a dispassionate, factual account of obvious flaws in the story.

    The fact is this is weaker than weak. You can tell that becasue 75% of the original article is dedicated to the completely unrelated Countrywide loans that went to Chris Dodd and Kent Conrad (which are fishy, imo).

    What the article says is that Obama got a loan at a rate below average, something that could be written about 50% of the loans issued in the U.S.

    There are many, many legitimate reasons loans get discounted, several of which (high income, lots of assets, low debt, competition from other lenders) clearly apply here.[/QUOTE]

    no- I mean you avoided the issue posted...as you continue to do....

    I posted a portion and linked the article from the WaComPost which specifically references how, when even getting a discounted rate, BO avoided the fees and points that go along with that discounted rate....

  16. #16
    [QUOTE=Come Back to NY;2613212]no- I mean you avoided the issue posted...as you continue to do....

    I posted a portion and linked the article from the WaComPost which specifically references how, when even getting a discounted rate, BO avoided the fees and points that go along with that discounted rate....[/QUOTE]

    Paying points is not a discount. The banks let anyone do it because it reduces their risk.

    The fact is not everyone who applies for a mortgage gets the same rate. Banks offer better rates to people with better credit scores routinely. We don't know Obama's credit score, but what's been reported about his finances --millions in the bank, no credit card debt, high income-- suggests it would be very, very good.

    If you have exceptional credit, you will routinely be offered a better rate than someone with average credit who wants the same loan.

    He's also said that he had lenders competing to make the loan, which also is a very common tactic used by creditworthy people to lower rates. (Ever call your credit card company to tell them you got a 0% teaser rate in the mail? Often they'll lower your rate to keep your business.)

  17. #17
    [QUOTE=Come Back to NY;2613212]no- I mean you avoided the issue posted...as you continue to do....

    I posted a portion and linked the article from the WaComPost which specifically references how, when even getting a discounted rate, BO avoided the fees and points that go along with that discounted rate....[/QUOTE]

    points are not a foregone conclusion.

    I myself received a lower rate, and did not get any points on the loan due to the larger than normal down payment my fiance and I have made, plus our credit ratings.

    Even the clipping you provided infers that it is not something that occurs with every loan;


    [QUOTE][I]Obama paid no origination fee or discount points, [B]as some consumers do [/B]to reduce their interest rates. [/I][/QUOTE]

    it only implies that some consumers pay points, but not all

  18. #18
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    [QUOTE=piney;2613301]points are not a foregone conclusion.

    I myself received a lower rate, and did not get any points on the loan due to the larger than normal down payment my fiance and I have made, plus our credit ratings.

    Even the clipping you provided infers that it is not something that occurs with every loan;


    it only implies that some consumers pay points, but not all[/QUOTE]


    I have near a half dozen mortgages on properties I own and am well aware how mortgages work....BO put down 20% on his mortgage, larger then normal but not huge....he just didn't receive a deal compared to people in general- he received a sweetheart deal compared to people in a similar situation:

    [QUOTE]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. [/QUOTE]

    fact is in a previous post a liberal is trying to compare a credit card to a $1.3 million mortgage, which is laughable...BO didn't pay any of the fees which come with a discount rate- unusual for someone who, according to the WaPost article had no relationship with the bank or other mortgages with the institution...

    [QUOTE]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.[/QUOTE]

    of course let's not forget this little diddy, again from the WaPost, shall we..

    [QUOTE]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. [/QUOTE]

    granted- there's no breakdown as to when they donated the money to him...

  19. #19
    [QUOTE=Come Back to NY;2613346]I have near a half dozen mortgages on properties I own and am well aware how mortgages work....BO put down 20% on his mortgage, larger then normal but not huge....he just didn't receive a deal compared to people in general- he received a sweetheart deal compared to people in a similar situation:



    fact is in a previous post a liberal is trying to compare a credit card to a $1.3 million mortgage, which is laughable...BO didn't pay any of the fees which come with a discount rate- unusual for someone who, according to the WaPost article had no relationship with the bank or other mortgages with the institution...



    of course let's not forget this little diddy, again from the WaPost, shall we..



    granted- there's no breakdown as to when they donated the money to him...[/QUOTE]


    Again, it is not unusual for banks to waive fees for things like points when they are competing for a loan, as was apparently the case here, of someone with ample assets and exceptional credit.

    It is also not unusual for banks to offer favorable rates to someone who holds substantial accounts with same bank, which, again, is the case.

    This story falls well short of even approaching the appearance of impropriety.

  20. #20
    Nuu, strait yes or no questions, 2 of um in fact:

    --Do you believe Obama got the same treatement any other person would have in this case?

    Do you believe there was absolutely no motivation on the part of the lender/broker to get Obama a better deal than normal in this case, for any reason whatsoever?

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