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Obama's House is Back in the News

POSTED: 12:07 PM ET, 07/ 2/2008 by Derek Kravitz

Democratic presidential nominee Barack Obama's discount on a $1.32 million loan from Northern Trust in Illinois has again focused attention on the senator's purchase of his home three years ago.

In 2005, Obama, then a freshman Democratic senator who had first joined the U.S. Senate, bought a $1.65 million restored Georgian mansion in an upscale Chicago neighborhood. To finance the purchase, he secured the loan, which was 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," The Post's Joe Stephens reports. Obama's rate could have saved him more than $300 per month.

In March, the Obama campaign posted documents related to the home loan on its Web site. Those documents can be found here.

The real estate deal has come under scrutiny before. The Chicago Tribune reported in March that the house and adjoining yard had been owned as a single property, but the owners were listing them separately and asking $1.95 million for the house and $625,000 for the landscaped side lot.

Obama's friend and campaign contributor, Antoin "Tony" Rezko, took over the option on the side lot after Rezko learned Obama was bidding for the house.

Obama told the Tribune that he knew next to nothing about those transactions and does not recall when he learned that Rezko was interested in buying the side lot -- or even how Rezko learned it was for sale.

But they talked about the upcoming sales, the Tribune reported. "He said, 'I might be interested,' " Obama recalled. "My response was, 'Well, that would be fine.'"

Obama added: "This is an area where I can see a lapse in judgment." He said his motivation was "if this lot is going to be developed, here's somebody I knew. So I didn?t object."

Obama's mortgage questions come in the wake of the Countrywide VIP mortgage investigation. Conde Nast Portfolio magazine found that favorable loans also were extended to Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.); President Bush's former housing secretary, Alphonso Jackson; former United Nations ambassador Richard Holbrooke; and former Health and Human Services secretary Donna E. Shalala.

Former Fannie Mae chief executive James A. Johnson was chased from his job vetting potential running mates for Obama just four days after the Wall Street Journal reported that Johnson may have received preferential treatment on his own Countrywide loans.

By Derek Kravitz |  July 2, 2008; 12:07 PM ET
Previous: More Problems for the Credit Raters | Next: U.S. Audit Questions Aid Project in Paraguay

Comments

Please email us to report offensive comments.



What exactly was the prevailing rate at that time? My recollection is that it was about 5.5 - 5.8. Seems like 5.6 would be pretty close to the ballpark.

More facts needed here. Sloppy reporting.

Posted by: KathleenVS | July 2, 2008 4:12 PM

What a brilliant article.

For me to POOP on.

Please, I had 3.6%.

Posted by: Insult Comic Dog | July 2, 2008 5:06 PM

This is one of the stories that strikes close to home--a very close friend was a high-level exec at Northern Trust at the time. Northern Trust is not your typical bank and does not give competitive mortgage loans; it's not their bread and butter (duh, trusts are). So while 6% jumbos were the norm at the time, NT would have charged 6.25-6.50, plus points and fees. Obama paid 5.625 with no fees or pts. That saved him a lot more than $300/month. So, yes, this is a "real" story. Keep digging, WaPo. This is the US presidency we're talking about, and Chicago I am talking from.

Posted by: Clio1 | July 2, 2008 8:33 PM

You still don't get it. Obama was never interested in buying a house. The whole deal was a front by Rezko in an attempt to shield assets from GE and casinos. It's only Illinois' bizarre property law--which allows real owners' names to be shielded--which prevents a clear understanding of this episode.

However, I'm sure Patrick Fitzgerald knows all about it. Stay tuned!!

In the meantime, read Evelyn Pringle's "Curtain Time" articles at opednews.com, for a detailed discussion of Obama's crimes, particularly his criminal activity in connection with the boards legislation in 2003.

And this flunkey of the Syrian mafia is going to run the U.S.? Yeah--right into the ground!

Posted by: John Ryskamp | July 3, 2008 7:08 PM

3.6 was back in 200-2002 when every one was competing.. Jumbo's price a full point behind prevailing rates.. B. Hussain Obama got a heck of a deal.

Posted by: Jeff | July 5, 2008 7:14 PM

So a WaPo writer takes the sloppy work of another WaPo writer and reposts it. Another Pulitzer to the Post!

Posted by: Tina | July 6, 2008 7:35 AM

@John Ryskamp:

"Syrian mafia"? Right. Keep your xenophobia/racism to yourself.

Posted by: MHR | July 9, 2008 8:19 PM

The enshrined Alphonso Jackson takes the cake! Prison should follow!

Posted by: Yvonne Allen | July 12, 2008 12:33 AM

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