Pat Dollard

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The Swamp

by Frank James

The Washington Post has a large headline that has drawn some attention today, certainly from the Republican National Committee: “Obama Got Discount on Home Loan.”

The story goes on to say that in 2005 when Sen. Barack Obama and wife Michelle applied for a $1.32 million loan from Northern Trust, they got a terrific 5.625 percent rate on a 30-year mortgage for what is known in the industry as a “super, super jumbo” loan because of its size.

That rate was below the Chicago-area average offered on such loans at the time, the story reports and it notes that Obama paid no origination fees of closing points on the loan. So he definitely got a great deal.

The question is did Northern Trust give Obama preferential treatment because he was a newly minted celebrity senator? After reading the story the answer seems to be: Who knows?

The campaign told the WaPo that wasn’t the case, that Obama got a competitive offer from another lender and that allowed him to negotiate the better deal with Northern Trust.

The bank for its part says the loan comported with its business practices. Of course, if part of its policy is to cut good mortgage deals to the connected and wealthy, than a sweetheart deal wouldn’t be out of the question, would it?

For a bank that offers substantial private-banking business to rich clients, doing whatever it could to attract future business from the millionaire Obamas, including giving them a great price on a mortgage is arguably just plain good business sense.

It’s possible, given that reality, that someone similarly situated to the Obamas, with large incomes that were quickly becoming larger, thanks in part to the senator’s lucrative book deal, would’ve quoted the same price for a similar Northern Trust mortgage.

Still, coming as it does after all the disclosures of the erstwhile Friends of Angelo program at Countrywide Financial which apparently benefited some members of Congress and at least one former member of the Obama campaign team, James Johnson, who headed up Obama’s vice presidential selection process until stepping down because of the scandalette, this story about Obama’s mortgage is certainly worth knowing about.

Obama’s political opponents will certainly try to make something out of this story. But contrary to the famous adage, not all smoke means there’s a fire.