Ahhh…..Chicago politics. Ain’t it grand?
News today from the WaPo that even though Obama’s income had risen dramatically when he brought that mansion in Chicago, and even though he had no relationship whatsoever with the bank funding the loan, AND even though the mansion cost enough to be considered a super super jumbo loan (meaning mo’ money needed to secure the loan), he still received a discount on the loan.
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.
Compared with the average terms offered at the time in Chicago, Obama’s rate could have saved him more than $300 per month.
I love the part where the writer says SOME consumers pay discount points to bring down the interest rate. How many people do you know who get discounted interest rates without paying origination fees? I’m guessing nil.
So he got a discount…big deal right? Who cares right?
But amid a national housing crisis, news of discounts offered to Sens. Christopher J. Dodd (D-Conn.), chairman of the banking committee, and Kent Conrad (D-N.D) by another lender, Countrywide Financial, has brought new scrutiny to the practice and has resulted in a preliminary Senate ethics committee inquiry into the Dodd and Conrad loans.
Within Obama’s presidential campaign organization, former Fannie Mae chief executive James A. Johnson resigned abruptly as head of the vice presidential search committee after his favorable Countrywide loan became public.
Driving the recent debate is concern that public officials, knowingly or unknowingly, may receive special treatment from lenders and that the discounts could constitute gifts that are prohibited by law.
“The real question is: Were congressmen getting unique treatment that others weren’t getting?”
And lets not forget that Obama threw his VP right-hand man under the bus after it was discovered that he had received the same sweetheart kind of deal.
But here’s the deal. While there is no evidence that the bank in question had a program like Countrywide did, it sure does smell like political favoritism. Not as big of a deal as Johnson’s, Dodd’s, and Conrad’s, but you combine that with Tony Rezko’s involvement in the house deal when Rezko did not have the money to buy the property (at which point Iraqi financier Auchi comes in) and you get a fishy smell.